Real Estate vs 529 Plans: Why I’m Investing in Property for My Kids’ Future

Originally published on LinkedIn, this article expands on the strategy behind a deeply personal decision I made as both a Realtor® and a parent.

Real Estate vs. 529 Plans: Why I’m Investing in Property for My Kids’ Future

As a father and a real estate professional, I’ve spent a lot of time thinking about how best to prepare financially for my children’s futures, especially when it comes to college. For many parents, 529 plans are the go-to solution. But for my family, I’ve chosen a different path: real estate.

This isn’t about rejecting traditional college savings plans. It’s about building flexibility, equity, and long-term value. Here’s why I’ve chosen real estate and why it might make sense for you too.

What Is a 529 Plan?

A 529 plan is a tax-advantaged investment account that helps families save for education expenses. Contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs like tuition, books, and fees.

It’s a great option for many. But it comes with limits.

What’s the Downside of a 529 Plan?

• Funds must be used for qualified education expenses or face penalties

• Investment options are often limited to mutual funds

• Market volatility can impact growth

• No equity, no cash flow, and limited long-term versatility

If your child doesn’t attend college or receives scholarships, you may find yourself scrambling to make the account useful elsewhere.

Why I Chose Real Estate Instead

Real estate gives you flexibility that 529 plans simply can’t. Here’s how I look at it:

1. Equity That Grows With Time

A well-bought property can appreciate steadily. Over 15–18 years, that equity can become a powerful tool — either to fund tuition or to gift a financial head start.

2. Monthly Cash Flow

With the right property, rental income can offset ownership costs — or even provide additional income you can save toward college.

3. Multiple Exit Strategies

Unlike a 529 plan, you’re not locked into one purpose. You can:

• Refinance for cash

• Sell for a profit

• Transfer the property to your child later in life

4. Generational Wealth

A home can support college costs and give your child something to inherit; a major asset that extends beyond tuition.

📊 Comparison: 529 Plan vs. Real Estate

What Are the Risks of This Approach?

No investment is perfect. Here are a few things I watch for:

• Market cycles: Timing matters. Real estate appreciates over time, but not always quickly.

• Tenant management: Rental income isn’t passive unless you hire help.

• Liquidity: You can’t withdraw from a home like a savings account — it takes planning.

But for me, the benefits outweigh the risks. I see it as planting a seed that can grow into something much bigger.

Final Thoughts: Is Real Estate Right for You?

You don’t have to be a full-time investor to make this work. If you’re already thinking about buying a home, you may already be halfway there.

This approach isn’t for everyone. But if you’re thinking long-term, real estate might offer the freedom and flexibility a 529 plan doesn’t.

FAQs

Q: What if my child doesn’t go to college?
That’s where real estate shines. You can rent, sell, or refinance. A 529 plan penalizes you for non-education uses.

Q: Can I use both real estate and a 529 plan?
Absolutely. Some families use rental income to fund 529 contributions. The two strategies don’t have to be mutually exclusive.

Q: What kind of property should I consider?
Starter homes, duplexes, or condos in stable areas with high rental demand, especially in places like San Mateo County.

Want to Talk About Building a Smart Plan?

If you’re wondering how to start investing for your child’s future or even just how to buy your first home, I’m here to help.

Let’s connect today…

📩 vincent@vmartrealty.com
📞 (650) 787-6939

Want to see how this conversation started?
📖 Click here to read the original post on LinkedIn