8 Important Pros and Cons of Buying a Luxury Home
Most people dream of one day buying a luxury home. But even if you think you are financially ready to purchase a luxury home, there are some pros and cons to consider when entering into that lifestyle. Being able to afford such a home extends well beyond the initial purchase price.
Here are 8 important pros and cons of buying a luxury home you need to consider:
- Square footage
- Quality features and fixtures
- High-end neighborhood
- Simple upkeep and maintenance become a considerable expense
- It takes a village
- Luxury mortgage tax and insurance
- Furnishing a luxury home
If you can afford it, there are definitely plenty of enviable perks that come with buying a luxury home.
1. Square footage
One of the biggest ‘pros’ of buying a luxury home is the extra square footage they are usually associated with.
A larger-sized home is generally perceived as a statement of accomplishment and affluence.
Larger homes are much more accommodating for large families with multiple family members. Besides space for your immediate family, there are usually plenty of spare rooms to also accommodate guests. This comes in handy for holidays and family gatherings that bring with them visitors from out of town who need a place to stay. It’s so much nicer to be able to offer your family and friends a place in your own home than to make them seek accommodations elsewhere at a hotel.
Besides extra guest rooms, a luxury home usually also has space for a mother-in-law suite, which can come in handy as parents age, or when a family member or friend needs a place to stay for an extended time.
More square footage allows for more breathable space and open floorplans in the home overall. It also allows for larger bedrooms, bathrooms, and closets, and larger kitchens and family rooms.
2. Quality features and fixtures
Another ‘pro’ of buying a luxury home is the quality of the fixtures and features that come with the home.
Higher quality construction materials and fixtures are used when building a luxury home, such as flooring, countertops, and doors which give the home more elegance. It is also usually fitted with higher-end appliances that are all up-to-date.
Other features that can be found in luxury homes include large bathrooms with spa-like features, large walk-in closets, private swimming pools, tennis or other sports courts, movie theater rooms, multi-car garages, in-home gyms, wine cellars, extensive gardens and grounds, etc.
Another perk to buying a luxury home is the location.
Luxury homes are usually in prime locations. Within a large city, a luxury home will be located closest to amenities, parks, important landmarks, and transportation. Outside of a city, they are usually situated in nice neighborhoods, on a private piece of land with lots of space, and/or at a location with impressive landscape views.
4. High-end neighborhood
Another ‘pro’ of buying a luxury home is the ability to be a part of a high-end neighborhood.
A luxury home that is part of a community of other luxury homes not only has perks within itself but all-inclusive community perks as well. Perks that come with this higher HOA price tag might include extra gated or walled security, community recreational buildings, neighborhood pools and tennis courts, golf courses, private community boat slips, private community parks, prime access to bodies of water, etc.
All the perks that are a part of buying a luxury home come with a price that extends beyond the initial purchase price tag. It’s important to be aware of the ‘cons’ of owning a luxury home to make sure it does not end up becoming a burden and a decision you regret in the future.
5. Simple upkeep and maintenance become a considerable expense
One of the most significant ‘cons’ to be aware of when buying a luxury home is that simple tasks are a considerable expense.
Regular upkeep of the home is a job in itself. All the extra space and square footage mean that simple things such as mowing the lawn, cleaning the gutters, gardening and landscaping, and housekeeping are all formidable chores that require experts at dealing with them regularly.
One of the expenses that many new luxury homeowners fail to factor into their initial cost estimate is keeping updated with smart home technologies. To stay up to date with the technology throughout your luxury home, you need to stay current with the installation of any updates. These updates can happen anywhere from once a year to a few times a year and can cost up to $20,000 for each update.
Besides regular upkeep and maintenance, utility costs might be considerably more than initially anticipated. The electricity it takes to heat and cool such large spaces results in a substantial bill every month, along with other similar bills.
6. It takes a village
With all the regular maintenance and upkeep needed in a large home, it really takes a village.
It takes teams of landscapers, housekeepers, and maintenance workers not unlike the show Downton Abbey to properly run a luxury home. So not only do you have to consider the payment of the salaries of these workers, but you also need to be aware that, in a sense, you will be sharing the space in your home part of the time with them.
7. Luxury mortgage tax and insurance
Another ‘con’ to consider when buying a luxury home is the high yearly mortgage and property taxes and insurance.
Even when your home is paid-off, just the yearly taxes and insurance alone for a luxury home remain a significant expense and need to be factored into a long-term financial budget plan.
Some states like New York also have a “mansion tax” that adds an extra percentage of tax to homes costing $1 million or more. The tax can be anywhere from 1% of the sale price to 4.15%, and that can really add up.
8. Furnishing a luxury home
One last thing to consider when buying a luxury home is that furnishing your new home is a very significant and expensive task.
All those extra rooms all need furniture. And the elegance of a luxury home needs to be matched with elegant furnishings. And no interior design of a luxury home is complete without acquiring a collection of quality artwork, which carries its own considerable price tag. So your decorating budget needs to be pretty steep. One can expect to spend about 10% to 20% of the purchase price on furnishing a luxury home.
One of the normal features of a luxury home is a wine cellar. The initial cost of stocking a wine cellar can be quite sizeable depending on personal taste and the importance of the collection.
There are many pros and cons if you’re looking to upgrade your life by buying a luxury home. Whether or not you can afford it extends well beyond the initial purchase price into the expense of the new lifestyle. Hopefully, this list of pros and cons helps you make the best decision for you and your family when it comes to purchasing a luxury home.
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