Real estate is one of the oldest and most trusted ways families pass down money. Right now, a huge wave of wealth is about to move from one generation to the next, and property is a big part of that story.

Experts say the key is not guessing where the market goes next. It's holding onto good property long enough to let it grow and pay you along the way.

Quick Take

• Cerulli Associates predicts $124 trillion will transfer between generations through 2048, with $105 trillion going straight to heirs.
• The typical homeowner gained $201,600 from rising home prices between 2014 and 2024, says the National Association of Realtors.
• Rental income has made up 70% to 80% of apartment investment returns historically, per a July 2026 review.
• There are three main ways to invest: do it yourself, use a private real estate fund, or buy shares in a public REIT (a company that owns property and trades like a stock).
• Tax breaks like depreciation (spreading out a property's cost as a deduction over time) can shrink what investors owe the IRS each year.

Why Real Estate Builds Wealth

Property makes money two ways: it goes up in value, and it brings in rent. Both add up over time.

The Urban Institute has linked owning a home to financial security. That's because a house is often the biggest piece of a family's net worth (what you own minus what you owe).

The typical homeowner gained $201,600 from price appreciation between the third quarters of 2014 and 2024, according to the National Association of Realtors.

That's not the whole picture, though. Paying down a mortgage each month also builds equity (the part of the home you actually own). And rental properties bring in cash every month on top of any price growth.

Landlords can also raise rent when leases renew, which helps income keep up with inflation. And because real estate often moves differently than the stock market, owning property can balance out a portfolio.

The Many Ways to Invest in Real Estate

Not everyone wants to be a landlord, and that's fine. Real estate investing comes in different flavors, depending on your budget and how hands-on you want to be.

Direct ownership means you're the landlord, the repair person, and the one answering late-night tenant calls. Private real estate lets you invest in bigger, professionally run properties without managing tenants yourself. REITs are the easiest entry point — just buy shares like you would a stock.

The Perks of Professionally Managed Real Estate

Many people don't realize they can invest in big, institutional-quality properties without buying a whole building themselves. PwC describes this kind of property as the type big institutional buyers look for.

Professional teams do the heavy lifting here. They research properties before buying, then handle leasing and repairs after the purchase.

Pooling money together also means getting better loan terms, since managing many properties gives a firm more bargaining power with lenders and insurers.

Spreading money across several properties this way also means a decision doesn't rest on just one person. That matters if an investment needs to last for decades.

How Taxes Shape Real Estate Returns

Taxes decide how much of your real estate income you actually keep. Depreciation is the biggest tool here — it lets the IRS treat a property as losing value every year, even if it's actually gaining value, which lowers your taxable income.

Investors can speed this up with cost segregation (breaking a property into parts that depreciate faster) and bonus depreciation, which currently allows a 100% deduction in the first year for some property types.

When it's time to sell, property held over a year usually gets a lower long-term capital gains tax rate. Investors can also use a 1031 exchange to swap one property for another and delay paying taxes altogether. And if a property passes to heirs, a step-up in basis resets its taxable value to what it's worth at death — often wiping out a big chunk of taxable gain.

REIT investors play by different rules. They get a tax break called the Section 199A deduction on dividends, but they don't get the same depreciation perks or access to 1031 exchanges as direct property owners.

Building a Legacy That Lasts

A strong real estate legacy isn't just about picking good properties. It's about matching those properties to what a family actually needs, now and decades from now.

Keeping a real estate portfolio steady over generations takes consistent management, especially when the people in charge change over time. That's part of why many families lean on professional managers instead of one family member running everything.

What's Next

As trillions of dollars move between generations over the next two decades, more families will lean on real estate to keep that wealth growing. The winners will likely be the ones who plan for consistency, not quick wins, and who teach the next generation why these investments matter in the first place.

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