This is a solid line of business.
The trouble is that everything goes according to the old standard. Buy, renovate, update the interior, tidy up the site and sell. Yes, that's exactly how it should go. The only question is how to renovate, what to fill with, what landscaping to do and how to sell. But the devil is in the details.
What is luxury real esate
Luxury Homes
If you approach the renovation exactly the same way as the construction of unique villas, then love. Real estate can be turned into a masterpiece. Design is not a price, design is an idea. Ideas are few and far between. A competent approach to decorating creates exactly the same effect as described above.
You just need to have a certain talent, and then the magic will come: the ugly duckling will turn into a beautiful swan.
This is especially true of Spanish interiors, which are often simply absent. Although I think other countries are not much different. We have devoted many articles to this.
Read “How design affects the value of property”
What is luxury real esate
Investment in old villa reconstruction
Many people think that renovation of old houses requires a lot of money. Repairing will also require a large budget and there is no point in investing, because such costs may not pay off. Therefore, most owners follow a well-trodden path. They reduce the value of their properties, often based on the advice of their realtors, in order to sell it faster.
However, this is not the case at all. In Europe, it is becoming a business for investment funds. They scan the market with the sole purpose of finding properties that could be bought as cheaply as possible, make repairs, change them externally.
The only goal is to create a new value for such a real estate and sell it at a good rate of return. Therefore, as a rule, it is such companies that win, and the losers are the property owners who, with a competent approach, could get their property so updated and changed that its market price could be much higher than they expected.
Transforming old villas into an attractive investment is one of the Investment Club's business ideas. For all the seeming simplicity of the issue, it's not all that simple. Of course, with a large budget, you can remodel and decorate any property, but it requires a solid investment and is not suitable for every property.
What is the secret here? The secret is that by applying to this type of business our principle of creating new value for such renovation, we transform this idea, in fact, into an investment project with a high rate of return. How is the value of a property created? Don't be lazy to read the article that explains it in detail. "WHAT IS THE MOST PROFITABLE INVESTMENT IN REAL ESTATE?"
Having made a good profit once, the owner of such a property is unlikely to want to step aside. Most likely, he will continue to be interested in part or all of his money with us.
So what is the secret of success here?
First of all, such a project must belong to the luxury category. The old villa used to be exactly in this category. One of the most important criteria for creating a new value is its location. This will largely determine the sales price on the market, but not only that. Not all properties have an excellent location. However, even then, it can be sold for much higher than what you are originally asking.
Investment Club is a great expert in all these subtleties. It has its know-how: everything we supply for all investment projects, we produce ourselves. What we do not produce, we bring in our partners. They are also producers.
Luxury Homes
The Investment Club deals only with luxury projects, because this segment has the least competition. We design new properties with a level of design that is almost unavailable today. We are not limited to anything in production. Whatever is invented can be realized.
This means that the cost of production becomes low, which means that the profit margin remains much higher than the average standard in this industry.
In addition, for renovation projects, we work with villa owners or private investors on a parity basis. In this case, it is important to us, in terms of getting the maximum profit, to make the appearance of such a property and perform the interior design so that we as a team with the investor would get the maximum profit. Thus, we do the project with the investor on the terms of the cost of everything and everything.
All the factories we work with, including ourselves, are factories in the niche segment, they work for the elite in Asia. We all produce in Asia in unique factories, capable of doing such unique things, which are simply impossible in Europe, neither in terms of price, nor in terms of quality, nor technologically. The European market has too little demand in the luxury segment, whereas the Asian consumer remains one of the most active consumers of this class.
That is why it makes sense to be serious about refurbishing old villas. This can be an excellent and long term business for the investor.
Today the market is flooded with so-called architectural masterpieces in the style of "villas" . This faceless architecture will sooner or later put the owners of such villas simply on the verge of selling them. Are we sure that someone will still need it in 10 years? And in 20 years? And if we look even further beyond the horizon of 25-30 years? I very much doubt it.
That's what's happening with the newfangled modern design style.
An overwhelming number of old villas remain in the classic style of old Andalusian architecture. They're 30 to 40 years old, and they're already morally obsolete.
When will the question arise that they are obsolete? The question will arise at the time of the sale. As long as the owners live in them, they're still fine. It was their taste, they're comfortable. But at the time of sale, we will be faced with an abundance of tastes. As many people as there are opinions.
And this is where, if we put our imagination to these objects, our efforts will be rewarded. Everything is not so expensive, if you do not overpay for everything and have a source for the supply of materials and everything you need for decorating the exterior and interior.
I keep saying that design is not about price, design is about ideas, and ideas can do wonders. Ideas can create value in a property, turning it from mediocre to unique.
That's exactly what we know how to do. It's one of our ideas of how to invest the minimum and get the maximum.