Investing in Luxury: The Top Considerations for Buying Ultra-Luxury Homes

Investing in Luxury: The Top Considerations for Buying Ultra-Luxury Homes
Luxury real estate caters to selective buyers, but ultra-luxury property follows distinct trends that set it apart from other homes on the market. When considering expanding your real estate portfolio to include ultra-luxury property, what must you know? What classifies a property as ultra-luxury? How will purchasing a property of this magnitude affect your investment portfolio?

Here are the top considerations for buying ultra-luxury homes and what you need to know before you start this journey.

What's the difference between a luxury and an ultra-luxury property?

To be considered ultra-luxury, a home must have unique and compelling features that make it truly stand out. Generally, a luxury home is in the top 5-10%, while an ultra-luxury home is in the top 1% of local listings. What factors place a home at the top of the market?

Location is key

Defining luxury and ultra-luxury homes is about more than just the price tag. To be considered a luxury property, location is a significant factor. A house in a desirable location, such as Bel Air or Beverly Hills real estate, is highly prestigious. These locales promise access to upscale or unique shopping centers, dining establishments, and proximity to similar luxury homes. Depending on the region, views will vary, but ultra-luxury real estate often includes highly impressive vistas of rivers, lakes, oceans, golf courses, mountains, or even stunning city skylines. Prominent and highly sought-after zip codes and neighborhoods are often an earmark of ultra-luxury residences if the property meets other criteria.

Size and space

Luxury homes often become ultra-luxury when the residence encompasses several thousand square feet of living space. Depending on the location, there are usually at least five to six bedrooms or more, with the number of bathrooms exceeding that. Expansive areas for family and entertaining are essential to many ultra-luxury buyers, as these homes are designed for hosting elaborate events. Guesthouses, family dens, and playrooms are important features. Outdoor spaces like pools, terraces, balconies, and premier outdoor kitchens are also prominent.

Design and quality

Homes designed by prominent architects or firms may instantly be more desirable, boosting them to ultra-luxury status. It is often the attention to detail that helps differentiate between luxury and ultra-luxury properties.

Ultra-luxury properties go above and beyond in their architectural designs, with custom, high-end finishes and opulent features at every turn. No expense is spared on materials, and the finest craftsmanship is executed throughout every room in the house.

Amenities and features

The amenities and technological upgrades in an ultra-luxury home go far above a luxury residence. Top-of-the-line appliances integrated with smart controls are typical features of ultra-luxury homes. High-tech camera systems, smart thermostats, and more are highly desirable for many ultra-luxury buyers. In addition to multi-car garages, buyers can expect to find infinity pools, movie theaters, home gyms, bars, game rooms, sports courts, luxury outdoor kitchens, wine cellars, and endless amenities catering to specific lifestyles.

Identify your goals for the purchase

It is best to weigh the pros and cons of every purchase against your long-term goals, which is particularly important when investing in ultra-luxury properties. To ensure your purchase is aligning with your financial objectives, you should consult your accountant, real estate lawyer, and financial advisor and consider their input carefully. Discussing the following points with your team can help you make informed decisions:
  • Is this ultra-luxury property for personal use or part of your business plan?
  • Will you live in the property, or will it be a second/vacation home?
  • Are you investing internationally?
  • Will it be used as a high-end vacation rental or long-term rental property?
Carefully consider your desired outcome for the investment because this will help you identify the right property.

Look into the local housing market

Researching the housing market and statistics where you intend to purchase is crucial, as local luxury markets vary and may be drastically different from overall trends. Your market needs to support your purchase and intended goals. For instance, if you are looking into Beverly Hills real estate, it’s essential to research recent sales prices and buyer trends. Other factors to research may include the local job market, the cost of living, and overall economic influences.

Are property values increasing or decreasing in the community? How will taxes affect your budget? If you are investing in an ultra-luxury property to use as a rental, will seasonal trends affect your financial gains? Understanding the local market is essential for determining whether or not the location suits your investment plan. Working with a trusted real estate agent is integral to ensuring you make wise investment decisions, as they are up-to-date on market conditions and can provide customized guidance.

Establish your priorities

As you research prospective neighborhoods, determine which communities offer the amenities and attractions you seek. Do you enjoy an active outdoor lifestyle and want to live near green spaces and parks? What about shopping centers and specific restaurants? Have you looked into the school district? Focusing on your lifestyle and priorities will provide direction and help your agent connect you with the most suitable properties.

Understand the search process

Ultra-luxury homes tend to go unlisted to protect the seller's privacy and target serious buyers only. Thus, it's advisable to work with a well-established buyer's agent who is highly familiar with the luxury housing scene. They will have extensive professional connections, giving them insight into unlisted properties that would otherwise go undiscovered.

You can't always rely on the photos

Photographs and virtual tours offer excellent insight into a property, but you can’t solely rely on listing images to tell the whole story. It can be challenging for even the most talented photographers to capture the architectural magnificence of an ultra-luxury property in a single set of images. If your agent thinks a property might be a good fit, schedule an appointment to view it in person as soon as possible. Walking through a property enables you to appreciate the finer details and discover its amazing features up close.

Patience is necessary

The luxury real estate market is limited, and the ultra-luxury market is even more so. The top 1% of the market is highly coveted, but while it can be competitive, you should not rush into making any decisions. Waiting for the right property will ensure you are happy with your home and investment in the long run.

Find your ultra-luxury home with Nancy Ellin Realty Group

When you are ready to purchase an ultra-luxury home, partnering with a top-tier agent with vast experience in the luxury market is essential. Nancy Ellin Realty Group is a top luxury real estate agent that corners the high-end market from the Hollywood Hills, Beverly Hills, Bel Air, Brentwood, Santa Monica, Pacific Palisades and Malibu. Nancy brings to the table an unmatched insight into the market, past and present, and what it takes to get the deal done, whether you are a seller or a buyer. Contact Nancy Ellin today

*Header photo courtesy of Nancy Ellin Realty Group

Work With Nancy

Whether you are relocating or an LA native, Nancy's knowledge, expertise and relationships will help buy or sell your home in Beverly Hills or Bel Air. Her full service approach, hand holding every step of the process while maintaining the highest level of attention to detail.