Real estate investments: building wealth with property in 2025

Real estate investment remains one of the most effective ways to build long-term wealth, offering financial security and the potential for strong returns. Unlike more volatile investments, property has historically provided stability while generating income through rental yields and capital appreciation.

With property values in prime locations rising by 5.3% year-on-year (Knight Frank, 2024) and rental yields in major cities reaching 4-7% annually (CBRE, 2024), real estate continues to attract institutional and private investors, with opportunities across the residential, commercial and hospitality sectors. 

As inflation reduces the value of cash savings and stock markets fluctuate, property investment is a key part of any strategy for wealth preservation and growth.

This guide explores how today’s most strategic investors approach real estate investment, why real estate consistently outperforms other asset classes and how the connection between real estate and the hospitality industry could present significant opportunities.

Why real estate is a strong investment option

If you’re comparing investment options in 2025, it’s worth keeping a close eye on real estate. In fact, according to Knight Frank’s Wealth Report 2025, 44% of surveyed family offices plan to increase their real estate holdings over the next 18 months, which demonstrates the sector’s appeal.

The industry’s strong performance is further supported by PwC’s Emerging Trends in Real Estate 2025, which forecasts dramatic growth and estimates the global real estate market reaching $14.6 trillion by 2030. 

So why are investors sticking with real estate? Here are five solid reasons:

• Tangible asset stability – Even when stock markets crash, real estate is still standing. Properties often hold their value through economic downturns, providing a sturdy foundation for building wealth
• Reliable rental income – Major global cities such as London, New York and Dubai deliver consistent 4-7% annual rental yields. This steady monthly cash flow is generated while the underlying property appreciates in value
• Effective inflation hedge – While inflation eats away at savings accounts, real estate investments stand strong. BlackRock’s 2025 Real Assets Outlook shows that real estate often outperforms volatile markets during inflationary periods, helping you secure portfolio value growth
• Tax advantages – Property investors enjoy substantial tax benefits unavailable to other investors. These include depreciation allowances, mortgage interest deductions and often preferential capital gains treatment on long-term holdings
• Hospitality sector growth – SiteMinder predicts a 2.5% global increase in hotel occupancy and a 4.9% rise in average daily rates over the next 12 months. For real estate investors, this robust growth in the hospitality industry presents lucrative opportunities 

The above advantages explain why financial experts consistently recommend real estate as part of a diversified portfolio. But to achieve maximum returns, you need to implement the right investment strategies at the right time. Understanding the most effective approaches, particularly those involving emerging hospitality opportunities, can significantly improve your investment success.

Key strategies for successful investment in real estate

Success in real estate investment requires a strategic approach that is aligned with current market conditions. The following strategies have shown promising results in recent years and continue to be effective in 2025.

Buy and hold for long-term appreciation

The traditional approach of purchasing properties and holding them for extended periods is still an effective one, especially in high-growth markets. For investors with patience and adequate capital reserves, this strategy provides:

• Steady cash flow from rental income
• Property appreciation in growing markets
• Mortgage paydown by tenants
• Tax advantages through depreciation

Short-term rentals and hospitality properties

The intersection between real estate and hospitality offers significant investment opportunities. According to JLL’s Global Real Estate Trends 2024, luxury serviced apartments are growing at 12% annually, outpacing many traditional rental markets.

“The hospitality real estate sector has demonstrated remarkable resilience and growth potential,” notes Michael Bellisario, Senior Hotel Research Analyst at Robert W. Baird & Co. in his 2024 Hospitality Investment Outlook. “Well-positioned hospitality properties in strong markets can achieve premium returns compared to traditional residential assets.”

This strategy works particularly well in:

• Tourist destinations with consistent visitor demand
• Business centers requiring executive accommodation
• University towns with seasonal housing needs

Value-add investments

Purchasing underperforming properties and improving them to increase value generates strong returns. This approach requires:

• Property identification skills to find undervalued assets
• Renovation expertise to improve properties efficiently
• Market knowledge to understand potential value after improvement

Real Estate Investment Trusts (REITs) and fractional ownership

For investors seeking real estate exposure without direct property management, Real Estate Investment Trusts (REITs) and fractional ownership platforms offer accessible alternatives. PwC’s Emerging Trends in Real Estate 2025 notes that digital platforms have democratized access to commercial property investments previously available only to institutional investors.

Trends and challenges affecting real estate investments in 2025

Technology is rapidly changing property investment, creating opportunities and new risks that did not exist five years ago. Investors who master these emerging trends gain advantages over competitors still using outdated methods, while those who ignore them risk making costly investment mistakes.

Three technological forces are reshaping the real estate landscape in 2025, fundamentally changing how the most successful investors identify profitable properties, manage their portfolios and structure their ownership. These are:

AI-powered property analysis

Advanced artificial intelligence (AI) now gives investors unprecedented insights into market opportunities. McKinsey’s Real Estate Technology Report documents how AI analytics have fundamentally changed property selection and valuation.

“Today’s most successful real estate investors rely heavily on predictive analytics,” explains Sarah Liu, Real Estate Technology Analyst at Deloitte in the analyst’s 2024 Commercial Real Estate Outlook. “These technologies process hundreds of location variables simultaneously, identifying emerging neighborhood trends 12-18 months before they become visible in traditional market data.”

Investors using AI-powered tools gain three critical advantages:

• Early market identification – AI algorithms detect subtle patterns in consumer behavior, business relocations and development permits that signal neighborhood growth before property prices rise
• Risk assessment precision – Advanced modeling evaluates potential investments against thousands of historical property transactions, highlighting opportunities with optimal risk-return profiles
• Rental income forecasting – Predictive analytics estimate future rental demand with significantly higher accuracy than conventional methods, helping investors avoid markets approaching saturation

Digital property management evolution

Property technology has evolved from simple accounting tools to comprehensive systems that transform how investors manage their investment real estate portfolios. Deloitte’s PropTech Survey found that investors using digital platforms can effectively manage 43% more properties with the same number of employees.

These integrated systems now offer:

• Comprehensive tenant lifecycle management – From AI-powered application screening to automated rent collection and lease renewal tracking
• Predictive maintenance scheduling – IoT sensors detect developing maintenance issues before they become costly problems while optimizing vendor coordination
• Real-time financial reporting – Instant access to property performance metrics, expense tracking and tax reporting documentation

Blockchain and property investment democratization

Distributed ledger or ‘blockchain’ technology is beginning to disrupt traditional real estate ownership structures. According to Forbes’ analysis of real estate technology trends, tokenization platforms are creating new possibilities for investors.

This technology delivers three key benefits:

• Accessible premium investments – Investors can purchase fractional interests in high-value properties that would otherwise be unattainable, starting with investments as small as $1,000
• Streamlined transaction processes – Smart contracts reduce closing times from weeks to days while cutting transaction costs by 50-70%
• Greater transparency and security – Immutable blockchain records create perfect ownership histories, reducing title insurance costs and virtually eliminating record-keeping disputes

The connection between real estate and the hospitality industry

Hospitality and real estate are two sides of the same coin. At its core, hospitality is about providing service and experiences to guests, but it all starts with real estate. Hotels, resorts and vacation rentals are all real estate investments. Without the right property, there’s no hospitality business to run.

Real estate decisions are critical to the success of a hospitality business because they determine a property’s potential for growth, income and long-term value. A well-located, well-designed hotel or resort can generate significant returns. But it’s not just about location and design, it’s also about how efficiently the property is run. 

Operational decisions, such as pricing strategies, guest experience and cost management, all impact the bottom line and can ultimately affect the value of the property itself.

For investors, hospitality real estate is not limited to collecting rent or watching property values increase over time—it also involves actively managing the asset to improve its performance. Investors who understand hospitality trends, such as customer preferences, the rise of eco-tourism and shifts in business travel, can make smarter decisions about where and how to invest.

At the same time, professionals with a background in hospitality can gain an edge by applying their operational knowledge to real estate investment. For example, by understanding what guests want and how to create exceptional experiences, they can identify properties with untapped potential and manage them more effectively to maximize returns.

One example is Laetitia Dreux, a Glion alumna who made a successful career shift from hospitality finance to real estate investment. After more than a decade in senior finance roles at a number of hotels in Paris, she brought her industry knowledge into the property sector, which gave her a clear edge when identifying high-performing assets and managing them with both guest experience and investor returns in mind.

In essence, real estate is the foundation of hospitality and professionals who understand both sides of the equation are best positioned to succeed. 

Managing market challenges successfully in 2025

Despite strong fundamentals, real estate investors must overcome several challenges to maximize their returns.

Managing interest rate impacts

Rising interest rates have affected property financing costs. According to CBRE’s 2024 Capital Markets Report, successful investors are:

• Stress-testing investments against various rate scenarios
• Securing longer-term fixed financing where appropriate
• Focusing on cash flow rather than speculation

Adapting to regulatory changes

Regulatory environments continue to evolve, which particularly affects short-term rentals and foreign investment. Mitigating these challenges requires:

• Local market expertise to understand regulatory trends
• Diversification across markets to reduce regulatory risk
• Maintaining compliance flexibility in operational strategies

Global investment opportunities

The international real estate market offers exciting possibilities, particularly in hospitality-related properties. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals are projected to grow by 3% to 5% in 2025 compared to 2024, assuming favorable economic conditions and continued recovery in various regions.

For investors, this sustained tourism growth opens the door to high-potential returns, but only if they take the right approach. Success in international real estate investment often comes down to three key factors:

• Cross-cultural understanding and local market knowledge – Cultural insight can make or break a deal. A deep understanding of regional customs, legal systems and buyer behavior can help investors avoid costly missteps and uncover hidden opportunities 
• Currency risk management strategies – Fluctuating exchange rates can significantly impact returns. Investors need tools such as currency hedging, forward contracts and localized financing to protect against volatility 
• Local partnership development in target markets – Reliable local partners such as developers, agents and legal experts can provide on-the-ground insight, streamline processes and build trust in unfamiliar markets

Investors with hospitality degrees often excel in international property investments due to their global perspective and understanding of traveler preferences across diverse cultures. Programs in hotel management schools provide the specialized knowledge needed to identify and maximize these investment opportunities. 

Future trends shaping real estate investment

Smart investors are watching several emerging trends that will impact property investment beyond 2025. These include:

Mixed-use development integration

Multi-purpose buildings that combine residential, commercial and hospitality elements are gaining market share. These developments typically feature:

• Residential units above commercial spaces
• Hospitality elements including serviced apartments
• Shared amenities creating community value

Technology-enhanced buildings

Smart building features add significant value to properties. Buildings that integrate advanced technology can deliver:

• Higher rental rates from tenants who value convenience and efficiency
• Lower operating costs through automated management systems
• Extended building life cycles through predictive maintenance

Climate resilience planning

Property investors now look at a building’s climate adaptation capabilities when making investment decisions. Properties with strong resilience features sell for higher prices thanks to:

• Reduced insurance costs for flood and severe weather protection
• Lower disruption risk during extreme climate events
• Energy independence through integrated renewable systems

Building wealth through strategic real estate investment

Real estate has always been a powerful way to generate wealth. But in today’s market, what you invest in – and how – matters just as much as simply owning property. Increasingly, hospitality careers serve as valuable stepping stones toward investment roles within hotel and resort development.

Hospitality professionals bring a unique advantage to real estate investment. Their firsthand understanding of operations and guest expectations allows them to identify high-potential properties, manage assets efficiently and maximize long-term returns.

Right now, opportunities for global hotel development are expanding, particularly in fast-growing tourism markets. With the right expertise, investors can position themselves at the front of this wave.

Photo Credits:
Main Image: Getty John Lamb