Jan 30, 2013

Five Housing Mistakes You Should Not Make If You Were A Sports Celebrity

Sports celebrities swim in three things, cash, fame and private pools. Because of the former two, they tend to have very expensive lifestyles and sometimes can spend thousands of dollars in a day in order to keep up with their status. But one of the biggest money gambles all sports celebrities make is when purchasing a home. You will find that while many of them can barely afford to, they will go to great lengths to purchase very expensive homes without regard to the intricacies involved in the transaction. So if you are a budding sports celebrity contemplating a big housing move, here are five mistakes you should not make.

Use all Your Earnings on the Purchase Price

Well, you just signed a new contract worth $50 million over five years and the first thing you do is go look for a house upwards of $20 million. Big mistake. Out of all the earnings you will make, the government will take up to 30% of it in taxes and then you have to contend with a high cost of celebrity living, which will wipe out another 20% over five years. This leaves you with a hypothetical $25 million. That house with a listing price of $20 million may seem affordable but the property rates, taxes and other additional costs will set you back up to $250K per year to maintain the property. This will drain you faster than you can throw that curve ball or shoot that hoop.

Buy a House in a Far Away Country

Sure, you have various movie and music celebrities living in their posh residences in France, Italy and Spain, the playgrounds for the rich. But this could also turn out to be a big blunder. Actors and musicians can afford to live non-geographically, as it were, because when they are recording or acting, they can be pretty much anywhere in the world. In addition, they tend to have pretty extended hiatuses between movies or albums so they can live anywhere at this time. As a sports celebrity, you ply your trade in a very limited geographical area and when you are not playing you are training and when you are not playing, well, you are training. This would make it very difficult to keep flying off to the south of France to take some rest.

Leave all the purchasing decisions to your lawyers

Lawyers are a necessary evil in our society, where the operative term here is evil. Knowing that they can get very high retention fees from you as a celebrity sports star, they will play any tune you request without caring too much to inform you dully of the risks involved. For instance, some lawyers may advise you to invest your fortune in real estate and “flip” houses. This makes sense and is usually a good idea, but not when you are trying to flip million dollar houses. These ones take time to sell and they do not always offer a good return on investment. Moreover, when you do get into hard times, guess who will be the first to ditch you for the next big thing? Yes, those lawyers that promised you heaven. Take time to understand your trade, whether it will be flipping house or running a fast food chain, then work with family and close associates to realize this incrementally.

Decide to divorce your wife of ten years

Well, this is perhaps the hardest to implement because most people do not enter marriage with the intention of divorce. But just ask Michael Jordan or Tiger Woods, divorces hit you where it hurts the most, your bank account and in the settlements guess who ends up with the house, your estranged wife. So treat her nice and be faithful to her, if you have made a big home investment, it will go a long way in ensuring it stays in the family, literally. If you decide it’s time to pack your bags and go live a little, be prepared to leave a sizable chunk of your earning s behind.

Guest post by Scott Ryan, who is not a celebrity sports personality but who thinks he is a celebrity writer for Call Mum, a real estate upgrading firm.

Image Credit: 1, 2, 3.

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