Should Celebrities Consider Their Strengths Prior to Investing in Real Estate?
Celebrities are often looked upon as being superior to the common individual, but a recent article proved that even A-List stars are subject to poor real estate decisions due to their lack of market knowledge and in not understanding what renovations provide the highest return on the investment.
Scarlett Johansson, star of Iron Man 2, recently found herself in an investment blunder. After purchasing an exclusive $7 million Spanish villa in Los Angeles and putting money into refurnishing windows and updated appliances, the actress placed the home on the market and sold the property for $5.1 million – acquiring a loss of nearly $2 million. Scarlett isn’t alone.
Lenny Kravitz, the celebrated Grammy winner recently encountered a similar debacle. The performer, who owned a 6,000 square-foot duplex in the swanky area of New York’s SoHo, took a hit when he sold his residence. After spending over $1 million in flooring, décor and outdoor entertainment additions, Kravitz initially placed the home on the market for $19.5 million and saw no results. In turn, he was ultimately forced to sell the property at $14.9 – taking nearly an $8 million loss.
Perhaps the moral of the story is that celebrities should focus on their strengths – singing, acting and performing – and leave the world of real estate investing to those who possess to expertise to navigate through an often complex environment.