One of the most common mistakes that luxury homeowners make is not considering the costs to maintain a luxury home. A mansion with a private pool, 360-degree views, and a garden that would put Monet’s Gardens to shame may seem great, but bear in mind that the more expensive a property is, the more its maintenance expenses.
They think that they simply need to pay the $4-million price tag on their upscale property, without considering if they can afford the costs they’ll likely incur to keep it in pristine condition. In reality, upscale properties come with certain costs that can add up to thousands of dollars. You’ll soon end up spending tens of thousands more than you intended.
If you’re planning on purchasing a luxury property in South Florida, we’ve put together a few of the expenses you’ll have to set aside funds for. This will allow you to decide if an upscale property is in the cards or if it’ll cost you more than you can afford.
Why Do Luxury Properties Cost More to Maintain?
Any luxury property residential management company will tell you that luxury homes cost more to maintain. Compared to “ordinary” properties, upscale ones often come with more pricey amenities such as private pools, in-house spas, and more. The ordinary homeowner won’t have to think about these amenities because their home doesn’t have them. A luxury property owner, on the other hand, will have to set aside money for these expenses in order to maintain their home’s value. Simply put, upscale properties cost more since there’s more to maintain.
Homes with high price tags also tend to be located in upscale neighborhoods where they will need additional care. For example, a waterfront property in Miami would probably be more expensive because it would need to be repainted multiple times per year, due to the presence of saltwater in the air. And if your property is in a gated community, you’ll likely need to pay an annual fee for grounds maintenance, security, and more.
Here are the common costs you can expect to pay as a luxury property owner:
#1 Purchase Price
Upscale properties cost more than your typical home. Since they’re situated in prime locations, you can expect to pay a premium for these types of properties. Remember that location is everything – even if the property itself isn’t that desirable but its location is, it’s sure to come with a steep price tag.
If you plan on buying in an upscale neighborhood and turning it into a rental, be sure to consult a property management professional. They’ll be able to calculate if your future rent can offset the costs to buy it.
#2 Property Management Expenses
Managing a luxury property can be extremely challenging (who has the time to manage a ten-bedroom home?), which is why many homeowners partner with a luxury property management company. Property management fees can run tens of thousands of dollars per year, depending on the scale of the operations.
Even if working with a property management company means spending more, it’s an expense that pays off in terms of time saved and expertise. Property management agents will actually save you money as they can avoid the costly mistakes that you’d likely make. They don’t need to second-guess their decisions since they’ve been in the business for a very long time, making them pros at this point.
#3 Remodeling Costs
So, you paid top dollar for an upscale property, but its amenities are subpar? When homeowners purchase a luxury property, they typically conduct improvements to make it suit their style and taste. It’s worth mentioning that upscale properties won’t always be perfect when you buy them – you’ll probably need to budget for a remodel or two.
And, if you plan to rent your luxury property, you’ll have to boost its appeal as your tenants will want the best. Your VIP tenants will expect to experience that million-dollar lifestyle, so make sure it looks sleek and that it comes with the most modern amenities.
When improving a luxury property, be sure to outfit it with top-of-the-line materials and fixtures. For example, you wouldn’t use low-cost laminate on your countertops, would you? You would, however, use high-end materials such as granite, which costs around $40 and $100 per square foot. Similarly, you likely wouldn’t skimp when it comes to kitchen appliances. Simply put, your luxury property improvements should live up to luxury standards.
#4 Regular Maintenance Costs
If you want your luxury property to feel like a luxury property, you’ll have to set aside some money to cover your monthly maintenance costs. Remember, your property won’t always be in tip-top shape – the time will come when the windows will need to be cleaned, the roof will need to be repaired, the HVAC filters will need to be replaced, and the list goes on. If you fail to stay on top of your maintenance to-dos, you will end up with a dirty home that doesn’t look like it’s worth millions of dollars.
On top of that, you’ll need to budget for any fees you may have to pay for building maintenance (this is particularly true if you’ve purchased a unit in an upscale condominium). Buildings with desirable amenities like pools, gym memberships, parking, etc. tend to come with a hefty maintenance fee that can run into the thousands.
#5 Groundskeeping Costs
Who would spend millions of dollars on a home with an unmanicured front lawn? It would make the most sense to set aside money for landscaping and grounds maintenance. To give you an idea of how much you’d have to spend, lawn mowing costs anywhere between $48 to $210, but you may have to spend more if your garden is spacious. Average landscaping (i.e. for “average” properties) can cost up to $10,000 per year, so expect to pay a lot more for your luxury property.
There are only some examples of the costs you’ll incur as a luxury homeowner. For an accurate calculation of how much it will cost you to purchase a luxury property, you’ll need to consult the real estate pros. At Luxury Property Care, we help clients decide if they can afford a particular property (considering the purchase price and costs) and if it’s worth it as an investment. We’ll crunch the numbers so you can be absolutely certain that you won’t be throwing away your money.
If you’re interested in purchasing a luxury property in South Florida, contact us at (561) 944 – 2992 or complete our contact form. We’ll look into the property and list all of the potential expenses you can expect to pay, allowing you to make a sound decision.