Wealthy Selling Real Estate

The last five, six years have been riveting times for real estate investors. In almost every market in the country property values have risen dramatically. And your high-net-worth (HNW) clients have likely participated in the boom whether they have invested directly in the property market, or have simply observed as the value of their homes increased.

Many HNW individuals have already reduced their real estate exposure says the most recent edition of the Merrill Lynch/Capgemini World Wealth Report. According to the report, the average HNW portfolio allocation to real estate dropped to 13% in 2004 from 17% the year before. The times change. Observing interest rates rising, it may be high time to sell real estate holdings.

I had found confirmation to these findings in informal conversations with my own clients and other professionals who work with HNW individuals. There is a real opportunity to lock in gains and sell a portion of the holdings. And experienced real estate investors seem to be taking this opportunity.

An exciting opportunity is in front of you, the advisor to the wealthy, with. Even if you are not strong in real estate transactions, your clients may expect you to be involved with the sale — if only to tell them what to do with the proceeds. Your wise advice will have a tremendous impact on your relationship with the client and, even more, on your ability to attract new busines.

In the next publication I will give some recommendations how to get a profit in such situation.
Michael Arbetov, CFP, FMA


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