Real estate in an FI portfolio refers to the role of property—primary residence or rental—in your asset allocation for financial independence. Property can provide rental income and diversification but is illiquid and carries concentration risk.

Pros

• Rental income — Can fund part of withdrawal in retirement.
• Inflation hedge — Property values and rents often rise with inflation.
• Diversification — Uncorrelated with equity in the short term.

Cons

• Illiquidity — Hard to sell quickly; not suitable for emergency funds.
• Concentration — One property = one location, one tenant; high risk.
• Maintenance — Time and cost; not truly passive.

For FIRE

Keep real estate as a minority allocation unless you have expertise. Many achieve FI with index funds, PPF, and NPS alone. If you own a home, treat it as consumption (shelter) rather than investment. See rent vs buy for the ownership decision.