Real Estate Investing: A Good Choice or a Great One?

A Santa Barbara and Montecito Perspective on Strategy, Timing, and Long-Term Value

For more than two centuries, real estate investing has been among the most reliable paths to wealth creation. Industrialist Andrew Carnegie, one of history’s wealthiest individuals, famously observed that “90% of all millionaires become so through owning real estate,” underscoring his belief that property ownership was the most effective way to build and retain wealth. Decades of market cycles and economic shifts have only reinforced the enduring truth of that observation.

A luxury Mediterranean-style home with red tiled roof and a pyramid of gold bars on the front lawn

Building Wealth Through Real Estate

Despite shifting markets, rising prices, and evolving economic conditions, that principle still resonates. The question today isn’t whether property investing still works; it’s whether it remains a good or great choice for those willing to approach it strategically.

According to leading realtor Cristal Clarke, the answer depends less on market timing and more on understanding location, asset quality, and long-term intent, particularly in high-value coastal markets such as Santa Barbara and Montecito.

What Percentage of the World’s Millionaires Built Wealth Through Real Estate?

While the exact percentage varies by methodology, multiple long-standing studies and historical analyses support the view that most high-net-worth individuals have used real estate as a primary or foundational wealth-building tool.

Carnegie’s frequently cited estimate of roughly 90% reflects a broader truth: real estate plays a central role in the portfolios of many of the world’s wealthiest individuals.

Unlike stocks and speculative assets, residential property offers both financial return and daily utility, combining appreciation, income potential, and leverage in a single asset. This combination has proven durable across generations.

Why Real Estate Endures Across Market Cycles

Property ownership operates on a different timeline than stocks or short-term investments. While markets fluctuate, residential property values have historically trended upward.

What sets property assets apart is their versatility. A home can be lived in, improved, rented, refinanced, or held as a long-term hedge against inflation. That flexibility is one reason real estate continues to outperform as a wealth-building strategy across economic cycles.

A sprawling Cape-Cod styled luxury home on gthe Santa Barbara coast under a spectacular sunset.

Is Residential Real Estate Too Expensive to Invest in Now?

Experienced investors focus less on short-term rate movements and more on long-term ownership, location quality, and holding power. In premium markets, timing the market is often less effective than time in the market.

High prices often raise understandable concerns, especially in desirable coastal markets. However, price alone doesn’t determine investment viability. Rather than asking whether property is “too expensive,” seasoned buyers focus on value, location, and long-term holding power.

In markets like Santa Barbara and Montecito, limited inventory, strong demand, and lifestyle-driven appeal help sustain long-term value. Although entry costs may be higher, these markets often show greater resilience during downturns and stronger long-term appreciation than oversupplied regions.

Comparing Returns: Low, Mid, and Luxury-Level Residential Real Estate

While luxury homes may offer lower rental yields, they often outperform over time in appreciation, stability, and downside protection, particularly in supply-constrained coastal markets.

Residential Investment Comparison

Property Tier	Entry Cost	Rental Yield	Appreciation Potential	Risk Profile	Ideal Investor
Low-Level Homes	Lower	Higher	Moderate	Higher volatility	Cash-flow–focused investors
Mid-Level Homes	Moderate	Balanced	Strong	Moderate	Long-term wealth builders
Luxury Homes	High	Lower (relative)	Strong, driven by location and scarcity	Lower volatility	Wealth preservation and lifestyle buyers

Luxury homes in established, supply-constrained markets may offer lower rental yields, but they often deliver strong appreciation, privacy, lifestyle value, and long-term stability, making them attractive to high-net-worth buyers.

High-Profile Examples of Residential Real Estate Investment Success

Real estate’s long-term wealth-building power is best illustrated by the strategies of individuals who have consistently treated property as an appreciating asset rather than just a place to live.

Ellen DeGeneres

Television host and producer with a long history of buying, renovating, and reselling high-end residential properties in premier California markets.

For decades, Ellen DeGeneres has used residential real estate as part of a disciplined, repeatable investment strategy. Along with her wife, Portia de Rossi, she has bought, renovated, and sold a large portfolio of high-end homes, primarily in California’s most desirable markets.

Public reporting across multiple outlets has documented that DeGeneres and de Rossi have bought and sold dozens of homes over the years, often purchasing architecturally distinctive properties, investing in thoughtful renovations, and reselling them at a premium. Collectively, these transactions represent well over $100 million in gross residential sales, with estimates from mainstream media placing total lifetime real estate profits in the nine-figure range.

Their approach reflects a consistent strategy:

Buy in top-tier locations with limited supply
Focus on design-forward, high-quality homes
Improve rather than overbuild
Hold selectively, sell opportunistically

Most recently, DeGeneres and de Rossi purchased another home in Montecito, where they plan to spend part of the year. Their continued investment in the area reinforces Montecito’s appeal not only as a lifestyle destination but as a market with enduring long-term value.

Rather than speculative flipping, DeGeneres’ strategy resembles luxury value investing, leveraging taste, location, and timing to compound returns over time.

Barbara Corcoran

Founder of The Corcoran Group, podcast host of “Business Unusual,” judge on “Shark Tank”

Barbara Corcoran’s real estate success story is one of the clearest examples of how modest beginnings can scale into substantial wealth.

Her first investment was a small studio apartment in New York City, purchased out of necessity. That initial property doubled in value, allowing her to trade up incrementally. She moved from that studio to a one-bedroom, then a two-bedroom, and eventually to larger, more valuable properties. This equity-driven progression laid the foundation for what became The Corcoran Group, one of the most influential real estate brokerages in the country.

Corcoran has repeatedly stated that buying that first studio was the most important financial decision she ever made because it “got her in the game.” Years later, she sold The Corcoran Group for $66 million, a result made possible by decades of experience, market knowledge, and real estate leverage.

Her strategy highlights three timeless principles:

Start where you can
Build equity methodically
Let time and appreciation do the heavy lifting

Warren Buffett

Chairman and CEO of Berkshire Hathaway, whose long-term, value-driven investment philosophy closely aligns with durable asset ownership, including residential property.

Although Warren Buffett is best known for equities, his investment philosophy closely mirrors the fundamentals of successful real estate ownership: durability, intrinsic value, and long-term holding.

Buffett has long favored assets that generate consistent value over time and require minimal speculation. Through Berkshire Hathaway, he oversees a diversified portfolio with significant exposure to tangible assets, including housing, property insurance, and brokerage services.

The existence of Berkshire Hathaway HomeServices reflects this philosophy. Rather than chasing short-term gains, Buffett’s model emphasizes steady growth, strong fundamentals, and businesses — and assets — that retain usefulness across generations.

This long-view approach aligns closely with residential real estate investing in established markets, where appreciation, utility, and scarcity work together over time.

Cristal Clarke’s affiliation with Berkshire Hathaway HomeServices as the firm’s #1 individual agent worldwide reflects this value-driven mindset, emphasizing long-term strategy over short-term speculation — particularly in markets like Santa Barbara and Montecito.

Luxury all white single level home surrounded by lush greenery.

What Is the Best Way to Begin Residential Real Estate Investing?

Most investors start by:

Purchasing a primary residence
Building equity over time
Expanding into second homes or rentals
Focusing on quality locations and long-term holding

Working with an experienced local advisor is critical, especially in nuanced markets like Santa Barbara and Montecito.

When Is the Best Time for Millennials and Gen Xers to Begin Investing?

For Millennials and Gen Xers, the most consistent advice from seasoned investors is simple: start earlier.

Buying a primary residence is often the first step. Over time, equity accumulation can create opportunities to:

Upgrade to higher-value properties
Add rental or second-home investments
Leverage existing assets to build a broader portfolio

In Santa Barbara and Montecito, many investors begin with a primary residence, then expand into second homes or luxury properties where scarcity and demand support long-term appreciation. Waiting for the “perfect” moment often delays progress. Real estate rewards time in the market more than perfect timing.

The Takeaway

So, is property investing a good choice or a great one? For those who approach it thoughtfully, prioritize quality, and take a long-term view, residential property remains one of the most dependable ways to build and preserve wealth. When approached strategically, ownership becomes more than a place to live — it becomes a foundation for long-term financial strength.

If you’re considering buying or investing in Santa Barbara, Montecito, or any of the surrounding upscale communities, Cristal Clarke offers deep market expertise and a thoughtful approach to helping clients build lasting value. To explore your options, call (805) 886-9378 or email her at Cristal@montecito-estate.com. She’ll turn your real estate investment goals into a successful reality.

Of Related Interest:

Frequently Asked Questions About Real Estate Investing in Santa Barbara

Is now a good time to invest in Montecito real estate?
Do luxury homes hold value during downturns?
Should first-time buyers start with a primary residence?

Back to Articles

Client Reviews

“It was an emotional experience selling our mother’s home in Montecito that we all loved so much but Cristal made the process easier on our whole family by guiding us through the transaction every step of the way. She knows the market so well and everything she recommended was on point including the asking price, painting, and staging the home, which looked beautiful and helped the buyer envision her new home. We sold it the first day it hit the market with an offer above asking! Cristal did an incredible job communicating with us and the buyer to ensure that the transaction would run smoothly. We highly recommend using Cristal, she was a pleasure to work with! ”

- J & A

“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch