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Real estate investing, long considered a cornerstone of wealth-building, is undergoing a fundamental shift.
Historically, the model was simple: Buy property, hold it and watch it appreciate over time.
However, with changing social attitudes, economic realities and new investment products emerging, traditional real estate investing may be heading toward obsolescence. Younger generations, particularly millennials and Gen Z, are less interested in outright ownership and gravitate toward alternative investment models that don’t require buying entire properties.
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One of the key trends driving this transformation is the decoupling of real estate investing from homeownership.
Unlike older generations who viewed owning a home as a rite of passage and a symbol of stability, many younger people now see homeownership as a financial burden rather than a milestone. Instead of committing to a large mortgage, they prefer more flexible living arrangements such as renting and look to fractional property investments or real estate investment trusts (REITs) to gain exposure to the real estate market without the responsibility of full ownership.
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With fractional ownership becoming more mainstream, people can now own small shares of properties, like how they buy stock in a company.
This approach offers two major advantages: It lowers the entry barrier for real estate investment and better aligns with the preferences of younger generations who prioritize flexibility and diversification.
Instead of pouring their savings into a single home, they can allocate capital across multiple real estate assets, mitigating risk and increasing liquidity.
Investing on platforms like Jeff Bezos-backed Arrived offers investors the potential for returns through two primary channels:
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Dividends: regular income generated from rental income, property appreciation and other sources
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Appreciation: growth in the value of the underlying real estate assets over time.
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REITs provide an appealing alternative for those who don’t want the hassle of property management or even fractional ownership. However, critics argue that investing in REITs is not fundamentally different from buying public company shares.
