One of the most exciting parts of the real estate process is considering the purchase of celebrity real estate. If you have the connections and the finances to even make an offer on a celeb property, then you are already winning in the marketplace. However, just because you can make an offer and buy the property does not mean that you should. Here are some of the pros and cons of buying a house that was formerly owned by a celebrity.
What are the pros of buying a celebrity house?
The prestige of owning a home that was previously inhabited by a celebrity never goes away. Your social circle has a conversation piece for life, and you will always have something of an advantage. There is nothing wrong with being a status buyer if you can afford it, and buying into a celebrity property is basically the best investment ever that you can make in your status.
Depending on the nature of the sale, you may actually be able to purchase the property at a deep discount. Just because the previous owner of a property is a celebrity does not mean that person’s financial situation is in order. Many celebrities are selling on a tight timeline in order to cover expenses or move into a different location very quickly. Still others may simply not care enough to price the house at an industry standard profit margin. In any case, do your due diligence and look for the deal. Celebrity real estate is like celebrity life in general: volatile and unpredictable. If you stay awake, then you get the deal and the status.
Outside of the social equity that you gain in the purchase of a celebrity property, there may also be a financial equity that you gain as well. Depending on the status of the celebrity, your house value may actually go up! This may seb random and illogical, but there is no difference between the value of your house and that of a signed baseball from a player who just went to the Hall of Fame. For those who do not understand sports analogies: When a celebrity is upheld in general society, everything that is associated with that celebrity tends to go up in value as well, including the real estate that is associated with that celebrity.
What are the cons of buying a celebrity house?
In most cases, there will be a great deal of competition for a celebrity house. The name of the celebrity does the work of five real estate agents: As soon as the property is listed, it may find its way on media outlets. This media attention will bring additional buyers who want to get a piece of the status and possible equity that comes from ownership of the property. More buyers means a price that is usually bid up, and you may lose an opportunity on any immediate equity on the buy if you do not have an inside line.
Depending on the celebrity, you may not take control of the house in a livable condition. Celebrities are not the type to negotiate a contingency list with you, meaning that you will only have a limited amount of repairs and maintenance that you can ask for. Because dband for the house will likely be higher than dband for the average property, you lose leverage. You will likely also be dealing with the absolute best real estate agents and lawyers across the negotiating table. Their skill will also erode your ability to compromise in your favor.
Finally, you may have to deal with the fans of the celebrity and the media attention that comes with purchasing the property. People may come by your house like it is a tourist location or an historical landmark. For people who regard their privacy as sacred, this will likely seb like an insult.
Should I buy a celebrity house?
You must determine what you are looking for in real estate when you determine whether to buy a celebrity house. No matter how much botion you may have, try to make the decision from a personal and financial perspective first.
The first thing that you should consider is whether you want to actually live in the house at all. Do not become so blinded by the celebrity of the house that you forget to actually check to see if the amenities that you want are in the house.
Next, can you actually afford the house? If you buy a celebrity house, you need to make sure that you can keep it. You will need to associate yourself with the best real estate agent and lawyer that you can find, and they will be certain to tell you if you cannot keep up with the payments over time. This is, of course, assuming that you are not an all cash buyer. Even if you are, you should still talk to a celebrity focused real estate agent to go over all of the official pros, cons, and financial implications of buying a celebrity house.
Finally, determine your time frame and your plans for the house. You may actually be able to generate an income from the house depending on the fame of the celebrity by opening the house for tours. You may also look to flip the house quickly.
2 Point Highlight
This may seb random and illogical, but there is no difference between the value of your house and that of a signed baseball from a player who just went to the Hall of Fame.
Do not become so blinded by the celebrity of the house that you forget to actually check to see if the amenities that you want are in the house.
