Real Estate From A Billionaire’s Perspective
How do the world’s richest billionaires think about and use real estate investments?
Forbes’ richest billionaires, and almost 90% of U.S. millionaires place a high priority on real estate. They are famous for their impressive estates and massive investments. Yet, all too often those just starting out mistake these fruits with the ultimate goal. Or at least necessary accessories to boost their own egos and show the world how great they are. So how do the wealthiest view real estate? Why do they invest in it?
Privacy: One of the reasons the ultra-wealthy choose such elite penthouses and vast estates is for privacy. Once you start to make it big in real estate, you’ll discover not everyone is as happy about your success as you are. It often creates jealousy, and will make you a target – even from those you are trying to help. Keeping out the paparazzi becomes a necessity. You’ll want to create a cushion or hedge with land separating your home from spying eyes. Or move into an exclusive building with great security. This is why Equinox has done so well with its exclusive fitness clubs that come with a $26,000 membership price tag. A home is a castle, a retreat, and a place to get away from it all. Warren Buffett reminds us that his own home has been his greatest investment ever. These escapes can account for a significant amount of wealth. They become shelters from taxes and malicious lawsuits. They often represent a large part of inheritances to be handed down to the next generation.
Rights: For the sophisticated investor, real estate is more than a piece of turf or a home. The intelligent investor sees a far wider range of elements. Take a look at the investment histories of Donald Trump, Warren Buffett, John D. Rockefeller, and even King Solomon. They have leveraged oil and mineral rights, air rights, timber rights, and rights of use. There are many ways to profit from real estate investing. You can also use real estate to profit from other ventures. Have you been undervaluing the potential?
Safety and yield: Take a look at the most popular global investment destinations. They often aren’t the fastest growing markets. In fact, they are often quite the opposite. This is because the wealthy prize preserving their capital above all else. Income comes second. Speculating on growth through appreciation a distant third, fourth, or fifth. This is why they have continued to invest in Miami, New York, and San Diego. Southern California, in particular, offers a happy medium for those on their way up. Prime San Diego property is becoming an asset class of its own for wealthy international investors. While more suburban and rural parts of SoCal offer value and growth for those needing predictable traction.
Affordable housing is important: It might seem surprising to many onlookers, but affordable housing is heavy on the hearts of the wealthiest investors. Mark Zuckerberg and Facebook launched into multi-family housing for tech workers. Warren Buffett has said he is willing to pay more taxes to help others. One of Buffett’s longest running and most profitable investments focuses on affordable homes. Clayton Homes provides affordable manufactured housing and financing. Real estate is a superb vehicle for creating and preserving wealth. It is a smart choice for income investing and attractive yields. But, it isn’t just about getting. In fact; the most successful investors and real estate pros are those that give and serve others the most. Not everyone wants cheap, basic accommodations, but billions need them. It is critical to recognize that without affordable housing, businesses can’t have affordable workers.
It’s a tool for philanthropy: Real estate is not a destination or end goal for the world’s richest billionaires. Sure – they enjoy magnificent homes which enhance their lifestyle, but, they aren’t just for showing off. Their real estate investments aren’t just for personal gain. Forbes’ billionaires may enjoy jousting for position on annual ranking lists. Yet, most plan to give away the bulk of their wealth to charitable causes. Some plan to give all their business assets to charity. Bill Gates, Warren Buffett, and Tony Robins all have great homes. They are all serious about philanthropy, feeding the hungry, and solving social crises. Their investments provide them with a method to funnel billions to these causes. They get to enjoy fantastic living and lifestyles on the way. But their hearts and minds are more focused on helping others.
They are greener than you think: Some only see the spending, fancy cars, and obscenity of pollution from private jets and yachts. Those that do research will find those billionaires building and investing in homes are often the greenest. In many ways, they may be doing more for the environment and development of healthy homes than any other organizations. Clayton has green home models. Larry Ellison bought an entire island to convert into a sustainable paradise.