- Real estate is a long-term investment that never goes out of fashion, making it ideal for generating future wealth.
- Generational wealth helps break the poverty cycle in a country with a large economic disparity.
- Real estate can provide generational wealth through passive income, tax benefits, and inheritance.
Many people dream not only of attaining wealth for themselves but for their families too. To have wealth that can be passed on to the next generation is a sure way to secure one’s legacy.
Property is traditionally considered a solid and safe investment that creates wealth over the long term. This makes it the ideal vehicle for building generational wealth.
Note If you’re looking to purchase property, use our Bond Calculator to determine what you’re likely to pay on your home loan.
The benefits of real estate
- It remains a valuable asset regardless of market fluctuations.
- It never goes out of fashion.
- It grows in value over time.
- It can be easily transferred to the next generation.
Making a fortune is one thing; preserving it is another. A lot of people squander their wealth by spending too much on depreciating assets such as clothes, furniture, and cars.
Creating generational wealth through real estate
Real estate can generate wealth in the following ways:
- Buy-to-let. Properties that generate passive income through rent can be passed down to the next generation. You can even have your children manage the properties, providing them with valuable work and management experience.
- Tax benefits. Property ownership provides tax deductions and incentives such as capital gains and income tax advantages.
- Leverage. You can draw on existing assets to purchase more properties, thereby expanding your portfolio and increasing passive income.
- Inheritance. Real estate can be passed down through the family. This has been the foundation for many families that we now refer to as “old money”.
The importance of generational wealth
In a world that’s experiencing increasing economic difficulties, generational wealth is vital for security.
This is especially the case in a country like South Africa where the economic disparity is so huge. Investing in real estate and passing it down through the family is a way to break the poverty cycle. It’s the foundation on which families build their future.
Think of how this wealth could be used. Investing in children and grandchildren’s education, providing them with a safety net as they navigate the working world. All of these provide the springboard that future generations need.
Before entering the property market, it helps to get prequalified. This will provide you with an idea of what you can afford, and improve your chances of obtaining a home loan.
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