High Net-Worth Individuals Investing in Real Estate

Some of you may have read The Wealth Report put out by Frank Knight and Citi Private Bank, but for those that haven’t, allow us to point out some of the key facts. First off, it’s important to note that the individuals covered in the report are those with over $100 million in net assets and $25 million in investable assets, but that doesn’t mean the average person can’t learn from this group.

The biggest fact that jumps out when reading the report, is the amazing amount of interest these individuals have in real estate.

  • 63% already own or would like to own Beachfront property. I guess this means this home on Martha’s Vineyard shouldn’t have too much trouble selling then.
  • Over a 25% of those surveyed own or would be interested in owning a Ski Chalet.
  • The US is considered one of the top two locations for owning a second home, primarily due to the security of the investment.
  • Out of the full portfolio of investment assets, real estate generally makes up 23% of the portfolio.  This is makes real estate the largest segment of a HNWI portfolio.

For those doing the math on this, it means that on average, this group has at least $5.7 million in real estate investments, excluding their homes. When I saw these staggering facts I was reminded of the words of Andrew Carnegie,

Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”

I guess it’s time to invest. See more thoughts on Carnegie’s quote in an upcoming post.

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