A new survey from the Wall Street Journal and Barron’s found that ultra-wealthy individuals are increasingly turning to real estate investments to diversify their portfolios during a period of growing confidence in the economy. The WSJ Intelligence Consumer Confidence and Economic Monitor Study, which surveyed 828 readers, revealed that 36% of respondents with over $5 million in investable assets have diversified into residential rental properties, up 13 percentage points from the May survey.
Among those with more than $5 million in assets, 35% are investing in secondary or vacation homes, while 20% with less than $5 million are invested in rental properties and second homes. The survey also found that ultra-wealthy individuals are more likely to invest in real estate than those with lower asset values.
The respondents showed growing optimism about the economy, with 24% believing it will improve over the next 12 months, up from 18% a year ago. Concerns around inflation decreased significantly, and recession potential became the top factor driving economic pessimism.
Real estate sentiment has also increased, with 37% of respondents reporting feeling somewhat or very bullish about the asset class. The decrease in mortgage rates seen around the time of the survey is attributed to this growing interest. With market volatility, ultra-wealthy investors are diversifying their portfolios to manage risk by investing in defensive sectors such as consumer staples and healthcare.
The majority of respondents were self-directed investors, with 53% reporting this as their investment method, while 47% were advised investors.
Source: https://www.mansionglobal.com/articles/interest-in-rental-property-investment-rising-among-the-wealthy-wsj-intelligence-study-finds-5144eb87