A family has Rs 40 crore, 75% of it in three commercial properties earning a 4% net yield. Plan a reduction to 40% over five years and show what happens to the family's income along the way.

Sell the warehouse and the retail unit, Rs 14 crore, in two steps, and income rises from Rs 1.50 crore to about Rs 1.61 crore while property falls from 75% to 40%. The warehouse sale closes in year two and the retail unit in year four. Proceeds go 60% to a bond ladder at an assumed 7% and 40% to diversified equity. The 4% net rent was never a high yield, so diversifying does not cost income.

Because three buildings in one city are closer to one bet than three. A family whose income comes from three shops on the same street is exposed to one road widening. Three tenants, one property market and no way to sell a slice make this a concentrated positionA single holding or closely linked group of holdings that is large enough to decide the family outcome on its own. in everything but name. A vacancy at the office floor alone would remove Rs 64 lakh of the Rs 1.5 crore income, 43% of it, overnight.

Sell the smallest two, not the best one. The office floor is Rs 16 crore on its own, exactly 40% of the total, so keeping it and selling the other two lands on the target without splitting a building. The warehouse, Rs 6 crore, goes first because it is the easiest to sell and teaches the family the process; the retail unit, Rs 8 crore, follows two years later. Two steps also spread the tax across two years and avoid selling into a single bad market. Plan each sale to close at the start of a year so the income effect is clean.

Match them to the family's need for steady cash. Put 60% of each sale's proceeds into a ladder of high-quality bonds and deposits at an assumed 7%, and 40% into diversified equity with an assumed 1.5% cash yield, a blended 4.8%. Rs 14 crore at 4.8% earns Rs 0.672 crore, against Rs 0.56 crore of rent given up. The equity part also grows, which rent on an ageing building may not. State the limit: bond interest is taxed differently from rent, so compare after tax with the accountant before the first sale.

Close with what could break the plan. A weak property market could stretch the second sale beyond year four; the answer then is to hold the date loosely and the target firmly. Capital gains tax will reduce the proceeds that reach the portfolio, so the final share may land nearer 42% than 40% until the next year's rebalancing. The judgement for the family is that concentration, not income, is what changes, and that is the message that gets the first sale signed.