In the Ultra-rich’s investment portfolio, Land has the lion’s share

Real Estate is the billionaire’s favorite asset

Billionaires who amassed their wealth far away from traditional tangible assets are choosing to park their money in real estate. It is an excellent time for land investment. The fears of a nearing recession, the economic roller coaster, and the stock market going south are nothing but indicators of a high-yielding climate for land investment, according to the purchasing behavior of business magnates throughout history. So far, Bill Gates has acquired more than 269,000 acres of land in the United States. His counterparts seem to be following his lead.

Michael Sonnenfeldt, founder and chairman of TIGER 21, a club that gathers investors -each of them with at least $20 million in liquid assets- said during an interview with CNBC earlier this year, that members’ asset allocation has always been first and foremost in illiquid assets – mainly real estate and public and private equities. Historically, real estate got the lion’s share of the investor’s asset allocation, reveals Sonnenfeldt.

A resistant asset during economic turmoil

The economy being in a recession does not mean that real estate will not be impacted. The typical billionaire’s investment portfolio allocates an average of 25 percent to real estate. For the ultra-rich, acquiring real estate is an extraordinary store of value over the long term. The short-term instability during the global economic crunch represents nothing but a minor risk the rich are willing to take.

In addition to the 269,000 farmland acquired, Gates has recently won legal approval to buy 2,100 acres of North Dakota farmland that is worth around $13.5 million. Gates is following the steps of his good old friend Warren Buffet. Known for his long-term investment strategies, Buffet recently mentioned at Berkshire’s annual shareholders’ meeting – the company he currently chairs – that he would definitely buy land instead of Bitcoin. Warren Buffet considers the latter as worthless with no intrinsic value. The likes of Buffet think that cryptocurrency needs more time for further market exposure. Crypto needs to establish itself as a real and reliable store of value or currency of exchange.

What other business magnates think

Jeff Bezos, founder of Amazon owns a massive real estate portfolio valued at $500 million. Bezos recently launched a real estate investment platform for single-family home rental. He saw an imminent need in the market and found the appropriate solution. Increasing interest rates are limiting people’s purchasing power. Given these circumstances, people are opting for rentals rather than property ownership – a cheaper and more convenient solution amid increasing prices.

Battling with Amazon owner for the title of the richest man in the world, is French billionaire Bernard Arnault, CEO of Moet Hennessy Louis Vuitton (LVMH), the world’s largest luxury goods company. Arnault’s wealth traces its origins back to his career as a real estate developer before turning into the century’s luxury magnate. He keeps a keen interest in real estate investment and has recently acquired an estate estimated at $121.5 million in Beverly Hills. Similarly, earlier this year, Twitter’s potential new owner, Elon Musk, in a thread, mentioned that: “It is better to own physical things than dollars when inflation is high.”

Purchasing for the potential of future appreciation

Land continues to be regarded as an inflation-proof asset among the ultra-rich. These people know that the earth will not make any more land. It is a limited resource and a great investment for the long haul. It has never depreciated over time. Donald Trump is famous for buying properties when there is not much buzz around them. He would build his wealth waiting for these properties to appreciate eventually with time.

People attracted by the ‘get-rich-fast’ scheme (buying to selling) will end up falling into the trap of real estate purchasing as a result of the adjacent fees: commission, government tax, legal services during the transaction, Lands Registries’ fees, etc. Land is certainly and indubitably, a long-term investment. At Sparta, our Zero Percent Financing Strategy will help you acquire land easily. Our unique financing program offers you the opportunity to invest in land, without any excuse. If it is your first investment in land, reach out and let us turn your experience into a success. Your success in real investment is completely dependent on you, unlike stocks. With real estate, your options are unlimited. You can buy and then rent, you can develop it, lease it, divide it, and sell it after an extended period when it appreciates in value.

To start your investment journey with Sparta Grounds, contact one of our agents for more information on our Zero Percent Financing program and Investment Club.