Investors Buying Second or Third Homes
Lately many high net worth investors have been looking toward real estate, purchasing second and third luxury homes. We take a look at this trend and what it indicates about the luxury real estate market now and in the future.
Tangibility Overtakes Intangibles
In today’s world, people prefer to invest in things they can see, touch, and feel. Stocks and bonds certainly have their place in the investment world, but many high-net-worth investors are looking toward tangible investments that allow them to enjoy the fruits of their labors. As such, second and third homes have become a bit of a trend for people who enjoy luxury living and the finer things in life.
A Changing Investment Landscape
In previous times, wealthy investors purchased more than one luxury home to serve as getaways when their investment portfolios were already maxed out and they had ample amounts of cash to put into real estate.
The remarkably low interest rates in the US in recent years are part of why luxury homebuyers are taking advantage of the current market to diversify their portfolios. Luxury home-buying is no longer about taking your time and waiting for the perfect place to pop up; there’s a sense of urgency involved, and buyers are ready to pull the trigger once the right home appears.
In the coming year, tangibility in investments will rule the economic landscape. People want to be able to enjoy their investments in a tangible way, and this is something stocks and bonds simply cannot deliver.
Stability over the Unknown
Second and third luxury homes have become a safety net for buyers who are able to invest in homes valued at $1 million or more. Besides having a place where they can go to get away from their regular lives, additional homes provide the opportunity to obtain rental income or build equity that will later show itself in the face of a sale.
A second or third vacation home in sunny places such as Arizona and Florida has become a very real investment idea for people with expendable cash flows. These hard investments double as lifestyle enhancements that also cushion a person’s overall savings portfolio.
Markets ebb and flow, but for people who invest in second or third luxury homes, they can wait out a low tide in the market while still enjoying the fruits of their investments. There’s a certain stability in tangible investments that overtakes intangible uncertainties.
An Unprecedented History
Luxury home buying is experiencing unprecedented growth. Today, people can enter into the luxury market at better prices than they would have been able to a year or more ago. That said, interest rates have begun to creep up from their all-time-lows quite quickly, and homebuyers who are interested in obtaining a second or third luxury home are best to act soon. As interest rates are projected to continue to rise, monthly mortgage payments will surely see an uptick, too.
Are you considering purchasing a second or third home? Marana, Arizona is an incredible place where stunning landscapes and custom-built homes come together amidst a seemingly endless menu of amenities and entertainment options. We invite you to get in touch with us so we can tell you more about the amazing opportunities that await you at the Ritz-Carlton Residences, Dove Mountain.