Things to Know Before Buying a Luxury Property – Ralf Schmitz – Exceptional Homes

What should you consider when buying a luxury property?

“Basically, the purchase of a luxury property always follows one and the same pattern,” explains Tobias Kotzorek. “Firstly, the potential buyers contact a provider – be it an estate agent

or a project developer like RALF SCHMITZ – to get an overview of what is on offer at their desired location. If one of these properties appeals to them, they can familiarise themselves with it and look into their options for customising it as part of a non-binding product presentation.”
But is buying a luxury property really the right thing to do? This question is as subjective as it is complex; however, the answer falls mostly in favour of luxury real estate. Financial advantages, individual life planning, plus the security that comes with an investment of stable value that will benefit not only its owners but also future generations, all speak for themselves.

But why not rent?

A high-end property in a prime location is an investment that pays off – and not just for the buyers, who are considering using the luxury residential unit themselves. Although at first glance it may seem cheaper to rent a comparable property instead of buying it yourself, in the long run buying always proves to be the better decision. It protects against rising rents and, on top of that, allows owners to generate returns by renting out or selling their luxury property.
Furthermore, it proves to be much easier to raise outside capital for a real estate investment than for the purchase of other investment goods. “If you tie up part of your assets by buying a luxury apartment or a townhouse, you can sell this investment on at any time. In discussions with credit institutions, making the point of investment security is a winning argument,” adds Jan Lorenz.
“However, beyond these purely financial advantages, it is usually the owner’s life planning that proves decisive when it comes to buying a luxury property. What distinguishes home ownership from rental properties is above all the sense of freedom. Anyone buying a luxury apartment or townhouse knows precisely that they can live their life just the way they want to. Buying a property opens up enormous creative freedom, which owners in the luxury segment can get the most out of thanks to the generous floor plans – they may choose to install a wood-burning stove, a home spa, a private library or simply embellish the charm of an old building.”

What makes luxury real estate a safe investment for the future?

Compared to other financial investments, exclusive real estate has always proven to be particularly stable in value. This is mainly due to the fact that the demand for luxury real estate in prime locations is constantly increasing; after all, in this globalised world, prospective buyers at home are also increasingly competing with buyers from abroad.
“As supply is particularly scarce in the big cities, the prices for real estate in the fashionable districts of major German metropolises such as Berlin, Munich, Düsseldorf and Cologne continue to rise consistently,” says Tobias Kotzorek. “Every year of owner-occupancy gives them, the owners, double profit. Firstly, they benefit from the exquisite furnishings and the excellent infrastructure in the vicinity of their luxury apartment or townhouse, and secondly, they can be confident that their investment will consistently increase in value in the meantime.”
Furthermore, luxury properties also offer reliable protection against loss of value due to their high-quality workmanship. A substantial structure prevents renovation expenses and, thanks to their classic design, these residential units do not lose their appeal to potential tenants or buyers over time. Unlike fast-moving design trends, the subtle charm of genuine luxury never goes out of fashion.
“Incidentally, in terms of stable value, new modern buildings prove to be particularly advantageous in two respects,” notes Friederike von Greve. “Anyone who buys a ready-to-occupy luxury apartment or has a townhouse developed according to their personal requirements can rely on the fact that there will be nothing to complain about in this property for the foreseeable future. There is nothing outdated that will need to be renovated, and as everything has been designed according to the owners’ taste, no renovation for purely aesthetic reasons will be necessary for the time being. On top of that, new buildings also meet all the current energy efficiency requirements of a residential property. This means that the owners will not have to retrofit anything in this respect either and there will be no risk of the property turning out to be a cost trap after purchase.”