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Many people make the assumption that professional athletes only buy luxurious homes worth millions of dollars, but that's not the case according to Julian Williams of residential real estate firm Compass' Sports and Entertainment Division.
"Most athletes we work with are not buying the $5 million homes. That's the biggest misconception. They are buying the under $2 million homes," Williams explained in a recent interview.
The reason? That comes down to the typically short lifespan of a professional athlete's career. They must make the most of their earnings during their playing days and prepare for the long term.
"I worked with Matt Kemp, a $150-million-plus contract guy, and helped him buy his primary residence in Prosper about six years ago for $1.25 million," shared Williams.
For younger athletes, their primary focus is caring for their bodies and performing at the highest level to earn as much money as possible. But once they settle down and retire, their mindset shifts. They start thinking about second homes, vacation homes, and homesteads where they can build and grow their families for the next generation.
Williams shared further trends he's seeing in the work that he does within Compass' Sports and Entertainment Division in Dallas-Fort Worth in the interview that follows.
What percent of athletes rent or buy?
It's team-specific.
A lot of our football guys are leasing. They are on shorter-term contracts. Most of their deals aren't guaranteed.
Basketball guys want to be close to the arena, so many will be in short-term or market-rate rentals. They are some of our most spoiled guys who want the laundry services, the concierge, the dog walker, and more.
Our baseball players usually sign longer-term contracts that are guaranteed, and we often work with their wives when they purchase a home.
They know that DFW is a great place to purchase real estate wherever they are playing. There's no state tax, affordability is great, it's centrally located, and the proximity to airports is essential for them.
When an athlete signs a long-term contract, what happens?
Eighty percent of the time, you'll probably never talk to the athlete. You'll be dealing with their financial advisors the whole time.
I'm working with Creative Artists Agencies, one of the largest agencies in the country, specific to the NFL. One of its clients is a Dallas Cowboys player, who's buying his first house in Frisco, and I've been dealing with him because he's got some time.
We reviewed options A, B, C, and D when we analyzed whether he should renew his lease or buy something right now.
We analyzed whether the property he acquired today would be marketable for resale if he gets traded next year. If that happens, we'd also consider whether it makes sense to hold onto it to help him develop a real estate portfolio. Additionally, we looked into the possibility of using it for Airbnb and assessed how easy it would be to find short-term renters.
After going through all the options, we concluded that purchasing a house would make the most sense for him.
Now this price point is under $600,000 for a new build.
How does Compass's Sports and Entertainment Division work?
A group of 150 agents around the country cater specifically to sports entertainers.
The sports entertainment division is a group of vetted agents with experience, whether being past athletes or working with athletes.
We understand the language, how athletes move, their needs, and how to interact with their spheres and teams.
We have to be very fluid. For example, you have an hour-and-a-half window to show a house on a Tuesday afternoon because they just finished practice and have to go to physical therapy two hours later.
Out of the 150 agents, we all have diverse backgrounds. It helps to have a team because if a player gets traded from Dallas to L.A., I can call a Compass agent who specializes in working with athletes in L.A. that will give the most attention to this player.
This interview has been edited for brevity and clarity.
