Strategy No. 1: He upgraded and expanded existing properties
Let’s return to that five-story, Beaux-Arts limestone $14-million abode on the Upper West Side. Bloomberg, now 82, didn’t just sit on it; he grew it. In 2016, he bought the next-door townhouse for $14 million. The resulting triplex added two bedrooms, two and a half baths and 2,200 square feet.
Nor did he stop there. He bought more adjoining properties and removed walls to create a double-wide property that the Wall Street Journal estimates is worth more than $50 million.
What you can do: Eye adjacent properties to your own and see if they offer expansion opportunities, especially if they increase lot size. Or look at renovations that can up your value.
JLC’s 2024 Cost versus Remodeling shows that your best investment return comes from a simple garage door replacement, which can recoup 193.9% of its price, while a kitchen remodel will score you a 49.5% return.
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Learn MoreStrategy No. 2: He practiced patience
When looking at real estate as an investment, it’s all about — wait for it — location, location, location. And it pays if you really wait for it, as Bloomberg has.
Consider the property in Armonk, N.Y., an hour north of New York City, that he bought for $375,000 in 1993. It’s unclear whether he still owns it, but if so its value may have multiplied 10 times or more. The area’s median home listing price runs roughly $3 million, per Realtor.com.
What you can do: Scout out where you buy as the patience principle applies nationwide. According to a June article in Realtor.com, the average 10-year return on U.S. home prices since 1975 has been 57%. That varies from state to state and in New York, the average is 71%, placing it among the nation’s top five places to buy.
Strategy No. 3: He bought in desirable areas
In New York City, the 10-year appreciation rate is 79.2%, according to [proprietary data(https://www.doorloop.com/blog/the-new-york-city-real-estate-market) from NeighborhoodScout. As with premium stock, monitoring the highs and lows of such markets requires patience all its own.
Bloomberg has enjoyed the benefits of soaring markets in exclusive locales. The New York Times reported a marked home price “surge” in the Hamptons in 1981, again in 1997 and yet again in 2001. Fast forward to 2024 and the median home price has skyrocketed from roughly $850,000 in 2015 to $1.54 million, according to the Elliman Report.
The billionaire reportedly paid $20 million for the Ballyshear Estate, a 22,000-square-foot Georgian mansion built in 1910 and designed by the Olmsted Brothers, sons of Frederick Law Olmstead, who laid out Central Park. Massive appreciation likely applies to the former London home of George Eliot, which Bloomberg bought in 2015 for $25 million.
What you can do: Leverage price and interest rate dips. Britton cites Redfin data from April 2023 that shows home values fell 3.7% year-over-year to $790,000. Falling prices and lower interest rates offer prime opportunities to buy in local areas with fabulous addresses.
The 30-year mortgage rate, currently 6.79% according to the St. Louis Fed, has ticked up slightly since October but still sits considerably lower than the 7.76% recorded this time last year.
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Skip the waitlistThree more ways to make money in real estate
Strategies to make money in real estate from the home-buying sidelines include:
Real estate investment trusts (REIT). These companies own, operate or finance income-producing real estate, allowing you to earn income without buying, managing or financing properties. Morningstar views REITs, which have rallied since July, as still trading at discounted rates.
Exchange-traded funds (ETFs). These funds trade like stocks and contain a basket of holdings. Among the big winners, the Pacer Benchmark Industrial Real Estate Sector ETF (INDS) has returned 11.88% annually since 2018.
Crowdfunding platforms. With the passage of the Jumpstart Our Business Startups Act (JOBS) in 2012 and subsequent additions in 2015, companies can raise a maximum of $1 million over 12 months from non-accredited investors of any net worth level.
As the performance of crowdfunded real estate investments can vary wildly, always do your homework checking out potential opportunities. That also goes for the people behind them. If it’s your loudmouthed, pseudo-expert uncle, you’ll want to search for more promising property.
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