How to Afford a Luxury Condo

Living in a luxury condo can make you feel more relaxed, more secure, and less stressed. Depending on where you live, you might have access to valet parking, recreational areas, and even a beautiful view of the open water.

But for many, it seems like an impossible dream. Luxury condos are expensive and out of budget for most people, necessitating an upper-class salary or a high net worth for a person to afford them. But with the right personal finance steps and a bit of discipline, anyone can get to this level.

Purchasing a Luxury Condo Responsibly

First, you need to understand that renting a luxury condo isn’t always the best financial move – even if you can technically afford it. Let’s say you’re taking out a loan that will leave you with costs of $4,000 per month, and you’ll have about $2,000 per month in other expenses. You net $6,300 per month, so you can technically afford to move in!

However, there are flaws with this type of thinking. For starters, you won’t have room to accommodate price increases; if your living expenses go up by $500, you’ll have to move out. And you won’t be able to save up money for investments or emergency savings – meaning even a single emergency could force you to move as well.

You’ll want to be on solid financial ground before moving to a luxury condo; don’t aim for the bare minimum.

Adopt Long-Term Thinking

If you’re already making an upper-class income, you can probably afford a luxury condo as is. Otherwise, you’ll need to work your way up. While it’s possible to work your way up from poverty to wealth, it’s something that takes a long time; accordingly, you’ll need to adopt long-term thinking if you’re going to be successful.

It’s not enough to think about tomorrow, the next day, or even the next year. You’ll need to start making decisions that put you in a better position many years, or even decades down the road. This is extremely difficult, especially when you’re making daily sacrifices for a goal that seems profoundly distant, but it’s an obstacle you’ll need to overcome.

Set Long-Term and Short-Term Goals

Next, you’ll need to start setting long-term goals. Let’s say you want to live in a luxury condo by the time you’re 45 years old. How much money will you need? What are the total monthly living expenses associated with that lifestyle and how much of a salary will you need to afford that? Alternatively, how much net worth will you need to sustain that lifestyle?

From there, you can set short-term goals. If you need to make $150,000 per year to live in a luxury condo at age 45, can you make $100,000 per year by age 38? What about $75,000 by age 32? Your personal goals will vary, but you should have some kind of roadmap to success.

Prepare Your Budget (and Live Below Your Means)

A critical tool in your arsenal will be preparing a budget and living below your means. Essentially, that means spending less money than you hypothetically could, given your salary. For example, if you make $40,000, you can pretend like you make $30,000 and try to live off that.

These practices will build good habits, prevent you from accumulating debt, and allow you to snowball your savings over time. Even if you’re only saving $10,000 per year, with the right investments, that can quickly multiply over the course of a couple of decades.

Set a Course to Increase Your Earnings

Living below your means is great, but it’s also important to expand those “means” – notably, by increasing your income.

There are many ways you can do this. You can try to climb the corporate ladder, seeking promotions and new opportunities in your current line of work. You can go to college or get an advanced degree to open up new career opportunities. You can start your own business and work to scale it up. You can even take on an assortment of side gigs to pad your income further. The possibilities are limitless, but you need some kind of plan to grow.

Invest

Finally, you’ll need to invest. Take your extra money and put it into reliable and high-growth assets, such as a mix of stocks, bonds, index funds, real estate, and alternative investments. As long as you keep a diversified portfolio and do your research before buying, you should be able to secure a steady return.

Make Your Move

It might take decades, or even most of your life, to get to a place where you’re financially comfortable moving into a high-end luxury condo. But you can get there if that’s your goal. Once you have enough money set aside and you’re still interested in luxury living, you can review the condos available to you and make your decision.