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February 14, 2014updated 04 Apr 2017 2:30pm

High-net-worth investors and real estate: Spectrem

Twenty five percent of Millionaire investors with a net worth between $1 million and $5 million said they would invest in real estate with their investable funds, according to Spectrem Group research.

By Verdict Staff

Twenty five percent of Millionaire investors with a net worth between $1 million and $5 million said they would invest in real estate with their investable funds, according to Spectrem Group research.

That category finished fifth among industry sectors behind technology (57%), healthcare (53%), pharmaceuticals (41%), and communications (33%).

Fourteen percent of Millionaires said they have plans to invest, or increase their investment, in investment real estate. That is the same percentage as reported interest in the 2012 study.

Ninety-four percent of Millionaires own a principal residence with an average value of US$518,000. Twenty-nine percent own a second home or vacation home valued at US$274,000 on average.

Eighteen percent own residential rental property, 14% own undeveloped land, 4% own commercial rental property and 7% own other investment real estate.

Among ultra-high-net-worth investors with a net worth between US$5 million and US$25 million, 28% said they would invest in real estate, while 20% said they have plans to invest in real estate in the next 12 months. That is a 2% increase from 2012 figures.

Ninety-five percent of ultra-high-net-worth investors, those with a net worth between US$5 million and US$25 million, own a principal residence valued at an average of US$842,000. Forty-one percent own a second or vacation home with an average value of US$610,000.

Twenty-six percent own residential rental property, 21% own undeveloped land, 13% own commercial real estate and 13% own other investment real estate.

The younger the investor, the more likely they are to be invested in real estate. Among ultra-high-net-worth investors, 58% own a second or vacation home (well above the average of 41%), and 67% own residential rental properties. Forty-two percent own undeveloped

Only 11% of Mass Affluent investors with a net worth between US$100,000 and US$1 million plan to invest or invest heavier in real estate, and that is down from 14% in 2012. Only 82% of Mass Affluent investors owned their principal residence (compared to 94% of Millionaires and 95% of ultra-high-net-worth investors), only 17% had a second or vacation home, and less than 10% owned any other kind of investment real estate.

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