Are You Really Investing In Property Or Just Market Fluctuations?

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.

Trending: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?

Decoupling Property Investment From Living Spaces

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.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.

The Rise Of Fractional Ownership

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:

• Dividends: regular income generated from rental income, property appreciation and other sources
• Appreciation: growth in the value of the underlying real estate assets over time.

See Also: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100. 

Are REITs Just Stock By Another Name?

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.

While REITs offer exposure to real estate, investors are truly betting on market forces – interest rate fluctuations, lending policy changes and the overall health of the investment portfolio.

In this sense, REITs have more in common with the stock market than traditional real estate investing because the returns are driven more by financial market dynamics than the tangible value of the underlying properties.

Changing Landscape

The real estate market is evolving in response to new generations’ preferences and financial realities.

As traditional models lose appeal, new forms of property investment are emerging to meet the demand for flexibility, lower capital requirements and diversification. Whether this marks the death of traditional real estate investing or just a significant evolution remains to be seen, but one thing is clear – change is well underway.

You Can Profit From Real Estate Without Being A Landlord

Real estate is a great way to diversify your portfolio and earn high returns, but it can also be a big hassle. Luckily, there are other ways to tap into the power of real estate without owning property. Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.