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Billionaire and renowned investor Warren Buffett has seen mammoth appreciation for a getaway home he owns in Laguna Beach, Calif. He purchased it in 1971 for $150,000. Now Buffett is selling the six-bedroom, 6.5-bath home for $11 million.<\/p>\n
\nRead more<\/strong>: Finding Your Way Towards Financial Freedom<\/span><\/p>\n<\/blockquote>\n
Are there any lessons from Buffett\u2019s savvy investment that others can draw from who are looking for high appreciation over time? Realtor<\/a>.com\u00ae spotlights a few.<\/p>\n
Distinguish between price and value.<\/strong><\/p>\n
Buffett first bought the home in Laguna Beach not as an investment but simply because his wife liked the home. And he still paid top dollar for it. The equivalent of $150,000 in 1971 is nearly $900,000 today, according to the Bureau of Labor Statistics\u2019 inflation calculator. \u201cWhile the town may have been no big deal at the time, the home\u2019s nice layout and its proximity to the beach and to Los Angeles clearly offered value,\u201d realtor.com\u00ae\u2019s article notes.<\/p>\n
Buy and hold.<\/strong><\/p>\n
Buffett shared some of his best investing advice with shareholders of his company, Berkshire Hathaway Inc., in 1989: \u201cTime is the friend of the wonderful business, the enemy of mediocre.\u201d Time in real estate<\/a> tends to be on an owners\u2019 side. Buy and hold property for, say, 46 years and you\u2019re likely to see some appreciation (and pay off that 30-year mortgage<\/a>).<\/p>\n
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The Laguna Beach home was originally constructed in 1936. The Buffetts remodeled it several times over the years, taking the opportunity to spotlight some of the strongest sales points of the home as well. The Buffetts expanded the square footage of the home and added in views of the beach area from nearly every room in the home, says Bill Dolby, the listing<\/a> agent with Villa Real Estate<\/a>. They also added several decks, including an oversized viewing deck from the family room.<\/p>\n
Buy what you want to own.<\/strong><\/p>\n
Buffett didn\u2019t originally buy the house believing he was going to make a fortune from it at resale. He just wanted a getaway for his family and they liked the area. They\u2019ve spent many vacations and summers there over four decades of ownership too. \u201cViewed that way, he\u2019s more than gotten his money\u2019s worth, regardless of the appreciation,\u201d the realtor.com\u00ae article notes.<\/p>\n
Source: \u201cWhat the Insane Appreciation of Warren Buffett\u2019s CA Beach House Can Teach Us All,\u201d realtor.com\u00ae (Feb. 25, 2017)<\/em><\/p>\n<\/div>\n
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