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Real Estate Investing for Gen Z: Unique Challenges and Opportunities

Amr Adawi

April 13, 2023

Real estate investing has been the key to wealth for many investors who are focused on building long-term wealth. It's no secret that this investing channel is a great source of steady passive income and long-term appreciation. But real estate investing for gen Z can be a more complicated story. For many young investors, the idea of purchasing a full property can be intimidating and risky. 

The purchase price alone can be a huge obstacle, since this generation is just beginning to accumulate capital, not to mention the complexity of the vetting process, legal paperwork, finding a renter, and asset management. It can take up to 6-8 months for professional investors to complete this process, even with all their know-how and resources. No wonder that a Gen Z member can feel intimidated and put off by all this. 

This is where tokenized real estate investments can be a game-changer. The high entry price and complexity barriers are all basically eliminated by fractionalized real estate investments such as the ones we offer on the MetaWealth app. Here is why, with concepts adapted for the particular challenges encountered by aspiring Gen Z real estate investors.

Tokenized Real Estate Investing for Gen Z - The Simpler Path

Tokenized real estate investments offer many benefits for investors. By tokenizing an asset, it is divided into smaller, more easily tradable tokens, which can be bought and sold digitally with no paperwork involved. This provides increased liquidity compared to traditional real estate investments, making it easier for investors to find assets and purchase them faster and without the need for intermediaries.

One key advantage of tokenized real estate investing for gen Z is fractional ownership. This allows multiple investors to co-own an asset, reducing the overall risk of the investment. It also allows investors with smaller budgets to participate in real estate investing and diversify their portfolio across multiple assets. For many young investors, this is a great way to get started on building wealth at their own pace.

fractional real estate investing with MetaWealth

This is where MetaWealth comes in to help aspiring Gen Z investors build their wealth in the classic field of real estate, but in a novel, modern way, through fractionalization. Old wealth can be accessed through new tech-enabled means

MetaWealth offers professionally curated, vetted, rented, and fully managed assets that were previously inaccessible to its users. With MetaWealth, users can build their wealth portfolio with less risk and at their own pace for as low as $100

It's important to note that the low barrier to entry is just the beginning. To build long-term wealth, it's crucial to continue investing regularly and take advantage of the compound interest factor.

Real Estate Investing for Gen Z Basics: Compound Interest

What is the compound interest and what does that have to do with real estate investing for gen Z? 

For any type of investments, compound interest is the principle that allows a positive ‘snowball’ effect, allowing the investor to start gaining much more in time.

Compound interest is very important for long-term investment gains, so understanding it is key for a fruitful investment strategy. 

Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods.

"Interest on interest," or the power of compound interest, is believed to have originated as a principle in 17th-century Italy. It will make a sum grow faster than simple interest, which is calculated only on the principal amount.

For the purposes of calculating ROI on an ongoing investment, interest can be compounded on any given frequency schedule, from continuous to daily to annually.

The MetaWealth projections for each real estate asset available for investing on the app don’t take compound interest into account. That means the approximately 70% ROI that you will get on your initial investment after the first 5 years doesn’t even include what more there is to gain by reinvesting the passive income you can earn from your investment. 

Real Estate Investing for Gen Z Basics: Make a Plan and Stick to It

The best you can do for your financial future as a young investor is to make a plan, no matter how small, and just keep following it religiously. 

Even if you only invest $100 per month, if you do it regularly and keep reinvesting your earnings, the compound interest will help you get where you want to be in the future.

You actually have a tremendous advantage that older investors don’t have: time is on your side. The earlier you start investing, the faster you can achieve a state of financial freedom in the future, or retire early, or start investing in the big league, whatever your financial long-term goal is. 

As a young investor, you may have reservations about real estate investing, such as lack of knowledge, high risk, and high barriers to entry. But with the potential for long-term wealth building, diversification, and future-proofing your portfolio, real estate investing is more than worth considering as part of your investment strategy. 

By carefully considering the potential benefits and risks of each type of investment and working with a trusted advisor, you can make informed decisions about how to grow your wealth over time.

Don't just take our word for it - here are some success stories from some of MetaWealth's other young customers who are just starting out with real estate investing:

"I never thought I could invest in real estate with my limited budget, but thanks to MetaWealth, I now own a piece of a rental property and am earning passive income every month."

"MetaWealth has been a game-changer for me. I can invest in multiple assets without having to worry about managing them myself."

With these tips in mind, we hope that you're now convinced of the benefits of real estate investing for Gen Z. Take the first step towards building your wealth portfolio today: install the MetaWealth app and get started. 

You can also just use it to explore around and learn more about investing in general: our in-app learning center is a great place to get more knowledgeable about your finances. Good luck and remember: by starting early with investing, you hold all the cards for making your financial future brighter. 

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