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Helping HNW Advice Clients Invest in Real Estate

March 19, 2018

Financial advisors could boost their ability to grow their high net worth client base by improving their understanding of real estate investing, according to a report cited by ThinkAdvisor.

High net worth investors have been drawn to both commercial and residential real estate recently, but both markets are changing significantly, according to a report from Wealth-X cited by the publication.

Investment in high-end residential real estate, for example, had a slight decline recently, although it could signal a return to more stable growth after a substantial rise, Wealth-X says. Investment in commercial real estate has seen a similar “moderating trend,” the publication writes.

For starters, advisors need to keep in mind the various objectives of high net worth investors getting into real estate, Wealth-X says, according to ThinkAdvisor. Some seek stable investments that provide inflation protection and tax advantages, for example, while others are willing to take on more risk in secondary markets, the report says.

And many investors attach a personal element to real estate, such as being able to use the property, seeking real estate to be close to other family or using it for vacations, ThinkAdvisor writes.

In such cases, advisors would need to address local tax treatment of properties and any property management concerns, according to Wealth-X. In addition, advisors can further help real estate investors by getting plugged into networks for new opportunities, according to information in the report gleaned by ThinkAdvisor.

A separate Wealth-X study, meanwhile, has found that New York has the highest number of ultra high net worth people while London, despite having a smaller number of the ultra wealthy, has a similar number of second homes, the publication writes. Geneva has the second-highest concentration of ultra wealthy people, behind Singapore and ahead of San Jose, Calif., Wealth-X found, according to ThinkAdvisor.

By Alex Padalka
  • To read the ThinkAdvisor article cited in this story, click here.