Why Are Jeff Bezos, Adele & Miranda Kerr Buying a Home Next Door
Buying a home next door, like neighborly ties, can be complex. For instance, when you move into a property and invite your neighbors to a party but hope they don’t turn up. However, even lukewarm neighborliness has its benefits, mainly when someone is moving out. In some of the nation’s most desirable communities, sellers gradually discover that the ideal buyer is practically next door. Some even suggest always going to the neighbor before putting a house on the market. They further clarify that the neighbor will always pay more than anyone else, especially if they are a billionaire.
1- Buying a Home Next Door – Land Banking
The practice of buying up properties in the immediate vicinity of one’s house, known as “land banking”, has become increasingly popular. Adele, Rihanna, Annie Lennox, Anthony Hopkins, Travis Scott, Kevin Hart, Elton John, and Rob Zombie have all purchased nearby residences to add to their already lavish lifestyles. Jeff Bezos, Ari Emanuel, Chuck Lorre, George Lucas, Matt Groening, Facebook’s Jason Rubin, producer Doug Robinson, and power couple Barry Diller and Diane von Furstenberg are among others who have purchased adjoining homes. Following the purchase of a $19 million home in Brentwood in 2020, NBA star Blake Griffin went on to purchase two more homes in the neighborhood, one for $5.9 million and the other for $7.4 million.
Two of the most expensive acquisitions in 2021 are classic examples of the practice: Snapchat CEO Evan Spiegel and model Miranda Kerr’s $100 million-plus purchase of two plats in Holmby Hills and WhatsApp co-founder Jan Koum’s $87 million purchase of Malibu neighbor Diana Jenkins’ mansion.
2- Why Buying a Home Next Door Is Becoming a Trend
Some believe the trend began in 2017 when cities like Los Angeles updated its Mansionization Ordinance, limiting the size of single-family homes that can be built on a lot to forty-five percent of its size, down from fifty. If you can buy the property next door, your 30,000-square-foot lot can suddenly become a 60,000-square-foot lot as defined by leading industry experts. As a result, when the time comes to sell the land, developers or builders will be interested because they make money based on the square footage on which they build. As a result, the larger the plat, the more precious it gets.
The limited availability of land in major cities, as well as the comparatively tiny lots in high-end neighborhoods, is a factor. Additionally, they’re not making any more land so the greatest choice is often to purchase nearby properties that already have residences on them, which the new owner can choose to demolish or renovate. Next-door purchases can also be used to create a legacy trophy property that can be passed down through the generations. And, from an investing standpoint, it’s a safe option.
While the establishment of larger, more desirable estates raises the median value of nearby residences, neighbors’ reactions can differ. It’s excellent if someone well-liked in the area buys another piece of land and that prevents someone fresh from moving in. But if that person buys the neighboring property to demolish both of their houses and the neighbors have to live with construction for the next two years, that’s probably a different issue.
3- The Best Neighbor Is You- Buying a Home Next Door
The majority of real estate professionals including agents expect the trend will continue. Billionaire Nicolas Berggruen bought the historic $63.1 million Hearst Estate in September, and now he’s added a $12.3 million Mediterranean-style mansion to make a 4.5-acre compound. Former Google CEO Eric Schmidt, who just paid $61.5 million for the historic Barron Hilton mansion, has just paid $300,000 more than the asking price for a dated 1970s home next door. It just goes to show that the best next-door neighbor is sometimes you.
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