How Luxury Real Estate Is Made Profitable During COVID
Luxury real estate is typically perceived as too expensive to be profitable in times of financial uncertainty, such as now. The coronavirus pandemic has hit investors and their tenants significantly.
Indeed, for long-term residential tenants, rental down-sizing has become a popular approach to reduce monthly expenses. When it comes to luxury real estate, cutting costs feels like a counterproductive approach. As for holiday rentals, there is still a need for luxury holiday homes, especially at a time where households need to isolate safely and escape everyday stress to recharge their batteries. However, luxury holiday rentals tend to come in the shape of large cottages or mansions, which could be left empty while social isolation restrictions are in force.
Commercial tenants, on the other hand, are struggling to stay on top of their monthly payments. Luxury boutique and retail locations are at risk of remaining unused during the pandemic. Luxury commercial properties need to become covid-friendly to drive profits.
The bottom line: luxury real estate needs to change to meet the needs of tenants, both residential and commercial, during the pandemic.
Historic buildings turned modern rentals
Historic buildings are appealing property investments because they can bring both character and space. However, for investors who are hoping to renovate an old property for profits, buyers are more likely to be cautious during the pandemic. Rather than trying to sell, real estate investors need to focus on rental opportunities. With the services of specialist architects, such as Ian Abrams Architect Limited, older properties can be renovated to meet modern needs and requirements. Additionally, which budget limits in mind, it can be a good idea to turn a sizeable residential property into separate flats. This would enable investors to market a luxury property at a cost that tenants are happy to pay for the added value.
Rejuvenating the commercial properties
The key to investing in luxury commercial real estate is to understand how to turn a commercial building into a profitable property during the pandemic. As many businesses have been forced to either shut down or leave their premises, it’s essential to address today’s needs for commercial space: Safe co-working spaces. Indeed, at a time where home-based working becomes the new normal, entrepreneurs and small businesses owners need their own working space. A commercial building that allows office desk rental in a fully furnished interior can meet business needs.
Additionally, covid-friendly services such as daily sanitising and thermal CCTV camera systems can keep tenants safe. While commercial properties are a significant investment, if you can establish a rental system per desk, you can recoup your investment with freelancers, entrepreneurs, and self-employed professionals.
Can you save holiday rentals from the covid low?
Unfortunately, large luxury villas can’t be booked by multiple households anymore under the latest covid restrictions. However, they can be utilised for multiple rentals as long as you can figure out a way to keep each tenant safe. For instance, temporary separations can be added to mansions and villas with multiple bathrooms and levels for simultaneous bookings. Adding essentials such as a small kitchenette area and catering services will make the holiday homes user-friendly.
Luxury investors need to cut-down cost per use for their properties by multiplying the number of simultaneous uses through separations and safety measures. The process would make the properties relevant and affordable in the current financial situations, helping both landlords and tenants to survive the pandemic uncertainty.
