- Why do Luxury Apartments Cost More?
- Are Luxury Apartments Worth It?
- Making Your Decision: Aligning with Lifestyle and Goals
- Work With a Realtor to Find Your Ideal Luxury Apartment
The Upscale Appeal: Are Luxury Apartments Worth It?
There are multiple ways to enter the real estate market. You can buy a single-family home with a yard that you have to maintain in the suburbs, or you can invest in a luxury apartment or condo within a city.
Demand for luxury housing is rising, and real estate experts call it a hot seller’s market. This means that for every luxury apartment that gets listed, there are multiple buyers who are eager to own it.
Luxury apartments are different from standard accommodations because of their location, size, and amenities. But are luxury apartments worth it? In this article, we’ll share details about this real estate investment option as you decide where you want to live and what you want to buy.
Why do Luxury Apartments Cost More?
Luxury apartments cost more because they provide more value to customers. These housing units follow the same economic laws of supply and demand as any other property.
A house in a high-end neighborhood with a pool and home theater will sell for a higher price than a small bungalow in a less affluent area.
The same can be said for luxury apartments. The location, amenities, and design of the units will all impact their prices.
Here are a few factors that determine the price point for a luxury apartment.
As you start to explore luxury living, you will notice that many Realtors highlight the amenities that come with certain apartments. These amenities improve the experience of living there are set luxury apartment complexes apart from standard models.
Right now, some of the most popular amenities include a community swimming pool (or multiple swimming pools), fitness and gym equipment, rooftop lounges, concierge services, and valet parking.
Some luxury apartments even have spas or bars built into the complexes that are meant to be used exclusively by residents and their guests. The main focus of these amenities is to help people relax when they are at home in their apartments.
Location will always be one of the most important parts of real estate. You can change almost anything about a property except where it is located.
Luxury apartments are most commonly found in wealthy urban areas and high-demand downtown streets. Residents know their favorite restaurants, bars, shopping centers, and entertainment venues are only a short walk away.
Another popular place to build luxury apartments is overlooking scenic areas. Developers will highlight how the outdoor balconies of their units overlook the Rocky Mountains or provide an idyllic sunset on the Pacific Ocean.
Buyers are willing to pay more for these prime locations, whether they live downtown or in a beautiful natural area.
Better Security and Privacy
Many luxury apartments also have enhanced security systems that prevent people from walking around the units and potentially breaking in. They might have dedicated security personnel and digital locks to access common areas.
Not only do these amenities promote security, but they also create more privacy for residents. The complex allows people to escape from the rest of the world once they arrive in the secure parking garage.
Modern Design and Interior Finishes
There are both aesthetic and functional designs in luxury apartments that set them apart from standard living areas.
First, consider the appliances. Luxury units might have higher-end kitchen appliances (like Bosch or KitchenAid) and larger kitchens for residents to prepare meals. From an aesthetic standpoint, these apartments will have high-end layouts and design elements that match current trends.
For example, they might have marble countertops, high-end finishes, or space in the bathroom for a bathtub and a shower.
Community and Networking Opportunities
On top of offering a great location, developers have started focusing on the living experience of luxury apartments. While a mid-range complex might have a gym, a luxury apartment complex would have on-site personal trainers and fitness professionals who lead yoga, spin, and pilates classes.
There also might be community activities and networking opportunities that reflect the lifestyle of the residents – like business mixers and singles events.
As you search for a luxury apartment, decide whether you want to join a community of active members or a quiet complex where people keep to themselves.
Are Luxury Apartments Worth It?
While living in luxury apartment communities might seem like a fun and relaxing experience, there are still serious financial considerations that you need to review before you move into one of these spaces.
Don’t focus exclusively on the amenities. Instead, calculate the real cost of living in a luxury apartment.
Rent and Purchase Price Premiums
On average, luxury rental costs are 50% higher than standard apartment rates. If you would expect to pay around $1,500 per month for an apartment in your area, then you would need to budget at least $2,250 per month for a luxury unit.
Keep in mind that this 50% rule is an average rate. Some luxury apartments might have double or even triple the monthly cost of a standard model in the area.
If you are looking to purchase a luxury apartment or condo, the listing price will be higher because of the amenities, location, and lifestyle benefits that come with the unit. Before you start touring these units, make sure you can secure a mortgage or pay for a luxury apartment in cash.
Maintenance and HOA Fees
The rent or mortgage you take on is only the first financial cost to consider. Think about the utilities, internet costs, insurance, and taxes that also come with these units. Some elements, like utilities, might be included in your monthly rent or maintenance fees.
Many luxury apartments also have homeowner’s associations (HOAs) that come with monthly fees. Average HOA fees in the United States are around $200, but these will be higher for luxury apartments. These costs might prevent you from being able to afford a luxury apartment in your area.
Value Appreciation and Resale Potential
Despite the cost, many people invest in luxury apartments because of their long-term goals. They expect to earn more in the future years as they grow their careers, which will make luxury living more affordable.
Plus, the potential resale value can make the purchase worth it. When it is time to move, the luxury apartment owner can sell the unit and use the profits to buy another space.
Unfortunately, there is no guarantee that your luxury apartment will appreciate significantly. Market factors change frequently and can increase or decrease the value of certain units and areas.
Making Your Decision: Aligning with Lifestyle and Goals
Are luxury apartments worth it? It’s up to you to decide whether living in luxury is worth the price tag. Some people are happy to live in a mid-range apartment complex if they can save money while others want to find a building in a great location that provides high-quality amenities.
Here are a few things to consider.
Assessing Personal Lifestyle Preferences
First, reflect on whether the luxury apartment lifestyle aligns with your individual preferences. Decide whether you want to live in a city or prefer more space. You can also decide whether you want to stay in an apartment for now or if you are ready to look for a single-family home.
Build your living experience around your personal preferences. There are plenty of quiet apartment complexes that come with a pool and fit within your budget. You don’t have to live downtown or in a large apartment community if you don’t want to.
Look at your finances to make sure you can handle living in luxury. Make sure you fully understand all of the costs that come with luxury apartments – from HOA fees to monthly parking costs.
Financial experts recommend that only 28% of your income should go toward your rent or mortgage costs. You might be more financially comfortable in the long run if you wait a few years before moving into a luxury apartment.
Future Residency Plans
You don’t need a dedicated five-year plan, but consider where you want to be in the near future. If you want to start a family and have kids, you might not want to look at one-bedroom luxury apartments. Instead, look at two-bedroom units and houses that could be more accommodating for small children.
Also, consider if you want to stay in the area or if you potentially want to move. If you aren’t sure whether you want to stay in your current city, look for luxury apartments that you can rent rather than purchase. It is easier and more affordable to break a lease than to sell an apartment or condo that hasn’t had time to appreciate in value.
Work With a Realtor to Find Your Ideal Luxury Apartment
Are luxury apartments worth it? It depends on the buyer. Some people would rather pay higher rent rates if it means living in a space that accommodates their lifestyle factors. They pay for access to amenities and locations that are close to restaurants, entertainment, and shopping centers.
If you decide living in luxury is worth it, reach out to a real estate agent who can help. At FastExpert, we carefully curate agents who work with a variety of clients – including those looking to buy in the luxury market. You can find a quality Realtor who knows where all of the hottest complexes are so you can buy your ideal unit.
Check out FastExpert today and find a Realtor to help you find your dream apartment.