There are a lot of myths in the real estate world, and it can be tricky to sort fact from fiction. Welcome to Truth or Myth, where we look at the most common real estate myths, legends, and adages to see if there’s anything there.
Today, we’re asking: are celebrities real estate geniuses?
This myth essentially argues that celebrities have a knack for real estate. Maybe it’s because they tend to be connected, so they find out about deals early and can get in on them. Perhaps it’s because they are immersed in pop culture, so they’ve got a good sense of the next big neighborhood to blow up. Maybe it’s that they use their star power not to mention years of negotiating experience) to get a steal of a deal when they buy.
Whatever the reason (so the myth goes) celebrities are surprising at buying real estate.
We put our crack myth investigation team on it and found out, no, this myth is NOT true.
Yes, some lucky celebrities have made wise real estate investment decisions that ultimately paid off.
Ashton Kutcher, for example, bought a home in the Hollywood Hills in 2004, renovated it, and listed it in 2011 for x2.5 times the purchase price. Likewise, Uma Thurman sold her property in Greenwich Village for a $2.5 million profit, and Dennis Quaid listed what amounts to an equestrian ranch for a little over $15 million in 2011 that he purchased for $1.8 million in 1999.
However, that’s hardly a basis for assuming all celebrities are surprising at real estate investment, or that being a celebrity makes you better.
Because just as there are examples of celebrities who have achieved superb results with their homeownership.
… there are also celebrities who have crashed and burned.
Katy Perry, for instance, purchased a home in 2011 for $6.5 million that she was going to share with her then-husband, Russell Brand. But they broke up, and she was forced to sell for only $5.6 million.
Likewise, Christina Aguilera sold Osbourne’s mansion in for $11.5 million after two years on the market – which is precise, what she paid for it when she bought it.
And of course, there’s the mother of all celebrity housing missteps. Michael Jordan has been trying to sell his 32,000 square foot home for over five years now. Since purchasing it, he’s made significant renovations, including the installation of a basketball court (of course). He initially listed it at $29 million but has since chipped away at a price until now, when it sits just under $15 million. It’s still for sale.
So what does this mean? Well, it means that celebrities are just like us.
Yes, some of them have an eye for real estate and can make a killing. Others are terrible and lose vast sums of money.
And in the middle is most of them. There are countless stories of celebrities making or losing a comparatively small amount of money on the property when they want to move quickly after a breakup or happen to be in the right place at the right time.
But it looks like star power doesn’t have much to do with it.
Even Jennifer Aniston who, after buying for $21 million and selling for around double that, isn’t a real estate pro because of her A-Lister status. She renovated a prime-location mansion in a healthy market and in a creative, exciting way. Her house was featured in architecture magazines when it was finished. Of course, it sold for a big chunk of change!
All in all, the only difference between the stars and the rest of us when it comes to real estate is the sums involved. While most of us would balk at the thought of losing $100,000 on a property deal, that’s not such a problem when you’re cranking out movies for $10 million a pop.