4 Steps to Build a Financial Legacy with Real Estate

Investing in real estate is a powerful strategy to secure a stable financial future for your children. This guide outlines four essential steps to build a financial legacy through property investment.

From understanding the benefits and drawbacks to conducting thorough research, playing the long game, and boosting your investment, we cover all the key factors to ensure a smart and profitable real estate investment.

Discover how to make informed decisions that will safeguard your family's financial future.

Step 1: Understand the Benefits and Drawbacks

Real estate can provide significant advantages for your children, including wealth creation through property appreciation, a stable income stream via rental earnings, and diversification of your investment portfolio. Rakesh Sharma, CEO of Greenfield Township in Panvel, emphasized that investing in real estate requires a long-term perspective as benefits accrue over time. However, Suresh Gupta, managing director of Elite Homes, highlighted potential drawbacks, such as high initial investment, lack of liquidity, market fluctuations, and maintenance issues. Consider these factors carefully before making a decision.

Step 2: Do Thorough Research

When investing in real estate, thorough research is crucial. For instance, when Sunita and Rajesh Verma, a retired teacher and her husband, were looking for a plot for their children, they chose a property in Karjat surrounded by friends' homes, ensuring trust and reliability. Manju Desai, vice chairperson of Skyline Developments in Mumbai, advises focusing on location, growth potential, and infrastructure development. Opt for properties in established or emerging areas with good connectivity and amenities. Conduct due diligence and consult financial advisors to make informed decisions.

Step 3: Play the Long Game

Financial planners often view real estate investments with caution. Arjun Mehta, managing director of WealthSecure, explained that rental yields range from two to three percent, and appreciation can fluctuate between four to ten percent based on market conditions. Young families should consider starting a Systematic Investment Plan (SIP) to save for a significant down payment. By the time EMIs start, the repayment burden is reduced, and increased income over the years can cover additional expenses for children. Define the purpose of your real estate purchase, whether for education funding or supplementing an investment portfolio.

Step 4: Boost Your Investment

• Shortlist Potential Locations: Focus on areas with future growth potential.

• Choose the Right Property: Select a size and type that fits your children's current and future needs.

• Consult Experts: Understand pricing and market trends with the help of professionals.

Conclusion

Investing in real estate can create a lasting financial legacy for your children. By understanding the benefits and drawbacks, conducting thorough research, playing the long game, and boosting your investment wisely, you can make decisions that will secure your family's financial future.

For more personalized advice, consult with real estate and financial experts to ensure your investment aligns with your long-term goals.