What to do with all that money? It must be a tough challenge to face, watching the millions of dollars roll in and being left to decide where to put it. Don’t you wish you had that problem?
Yes, we are envious but also intrigued how celebrities invest their never-ending cash flow. While some celebs like Robert DeNiro and Justin Timberlake invest in restaurants, other stars such as Jay-Z and Ellen DeGeneres are drawn to tech companies. Real estate is also an investment choice for many of Hollywood’s rich and famous. Take a look at these celebrity real estate investors:
Ellen loves to diversify her investments. In addition to her interest in funding tech start-ups, she also does quite well in the real estate world. According to the Los Angeles Times, Ellen has made a profit on the same home not once but twice! She sold her Hollywood home for $10 million in 2007, then decided to buy it back in 2014 for a lower price tag of $8.75 million. She then sold it a second time for $9.9 million.
King of Queens star Kevin James sold his oceanfront mansion in Florida for a whopping $7.53 million profit. He purchased the home in 2012 for $18.85 million and sold it in 2016 for $26.38 million! This 3-acre home has eight bedrooms, nine bathrooms, seven fireplaces and a 10-car garage.
Kevin James’ Home – Photo: realtor.com
This A-list actor owns numerous properties across the United States including apartments in Manhattan, a Palm Springs vacation home and a mansion in The Hamptons. According to Mansion Global, you can rent his Palm Springs estate home with six bedrooms and seven-and-a-half bathrooms for just $3,750 per night (subject to a two night minimum of course).
Formerly known as McDreamy on the hit show, Grey’s Anatomy, Dempsey sold his Malibu home for an $8 million profit – almost double the purchase price. Who knew that McDreamy could make a McFortune on his real estate deals?
After some extensive renovations to her Beverly Hills mansion, Aniston sold her home in 2011 for a whopping $35 million. She purchased it in 2006 for $13.5 million.
Photo: Architectural Digest
While these celebrities can toss around a few million dollars here and there without much worry for appreciation, we can still learn from their investment tactics:
1. Location, Location, Location: Celebrities aren’t purchasing homes in random parts of the USA, they are buying in the areas everyone wants to live. Safe neighbourhoods close to restaurants, shopping, transit and easily walkable. You will never go wrong purchasing a home in a neighbourhood that is in high demand. Sure, you will pay a premium but that home will keep appreciating. In Toronto, neighbourhoods such as Bloor West Village, Roncesvalles, High Park, Leslieville, Davisville – these are neighbourhoods that will always be a great investment. Keep in mind that you can always change the look of a home but never its location.
2. Don’t Take Improvements Too Far: Let’s take a page out of 50 cent’s book. He purchased a 21-bedroom, 25-bathroom mammoth party pad in Farmington CT for $4.1 million in 2003. He pimped the place out to the tune of $6 million to $10 million in additional expense. Since 2007, he has tried to sell the home, starting at a list price of $18.5 million. In 2016, facing bankruptcy, 50 cent was forced to reduce the listing price to $5,995,000. The most interest he’s received, according to Realtor.com, is from a developer looking to covert the home into an assisted-living facility, minus the stripper poles of course!
50 Cent’s “Over-Improved House”
3. When In Doubt, Rent: Huh? A real estate broker advising someone to rent? Sometimes it makes more sense! New to the city? Not sure where your job is going to take you? Going through a divorce? Not sure about your current relationship? Consider renting until you are more comfortable with your life’s journey. In 2011 according to Trulia.com, Katy Perry bought a home with then husband Russell Brand for $6.5 million. The couple split up before moving in and Perry ended up selling the home at a loss ($5.65 million). Don’t worry – you are in good company. Many celebrities such as Rihanna, the Biebs (aka Justin Bieber), Lady Gaga and basketball star Ray Allen prefer to rent as well.
4. We All Start Somewhere: before becoming the Terminator and the Governor of California, Arnold Schwarzenegger used his body sculpting money to invest in real estate. He started small and eventually built up his wealth in order to focus on his acting passion. His first purchase was a six-unit apartment building in New York for $38,000 in 1971. Over time, he was able to invest in much larger purchases such as a $450,000 Santa Monica building, which he later sold for $2.3 million.