Anytime
Buying a condo to rent to your kid?
- Thread starter vafoodie
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Anytime
RetiredHappy
Thinks s/he gets paid by the post
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When we moved out of CA and wanted to sell our large home, my son had to move out to a place of his own. He opted to buy a place. He had enough to cover 1/3rd of the amount and I paid 2/3rd of it so that he owns it free and clear. I filed the gift form to IRS. Fast forward, we are glad he did that because rental has gone through the roof and there is no way that he can afford to pay for a rental. He feels the security of having his own home and expenses are quite a bit lower than paying rent.
Buying a place to rent to a kid is clean financially, but a lot depends on the people involved. How would you feel if the kid didn't keep it up the way you did? What if they want a significant other to move in? Are they responsible with financial payments or would you be "chasing" them for payments each month. What if they decide they don't want to live there after a few years, is this still the place you'd choose to downsize?
I think this arrangement works well for a lot of people, but I know some people where it could impact the family dynamics , so make sure this works not only financially but for the individuals involved.
I think this arrangement works well for a lot of people, but I know some people where it could impact the family dynamics , so make sure this works not only financially but for the individuals involved.
yakers
Thinks s/he gets paid by the post
I know of 2 cases where a parent bought condo/house for kids at UCLA and caltech, both did massively well as real estate investments, timing was great
Surewhitey
Thinks s/he gets paid by the post
We loaned DD for her first house and everything went well, so we doubled down on the upgrade home. They paid it off last year well ahead of plans. It served the purpose when they didn't have any credit history, kept their independence and they took it seriously.
Of course we drew up contracts and added income to the IRS. Pretty easy overall & saved lots of closing costs for them. They're sitting on a paid for $6-700k home now @ 36.
Of course we drew up contracts and added income to the IRS. Pretty easy overall & saved lots of closing costs for them. They're sitting on a paid for $6-700k home now @ 36.
SunGuy
Recycles dryer sheets
If you can do this, or find a small old cheap house for your kid they will be very happy.
My parents bought a little tiny old house from 1943(barely 1k sq ft) here in JAX about 9 years ago for $70k. They used a low cost HELOC from their house that they paid cash for from the sale of company stock.
The rate on the loan and low property tax and insurance means that they only needed $450 from us to cover those costs. So I lived here up until this year with my brother and they charged us $800 a month, so we each split it, $400 a piece.
Now that I live here by myself, I only pay $400, and they use the cash reserve to cover the difference. Since they don't really need the money, and are helping me save up money for a duplex out of state so that I can move closer to them.
My parents bought a little tiny old house from 1943(barely 1k sq ft) here in JAX about 9 years ago for $70k. They used a low cost HELOC from their house that they paid cash for from the sale of company stock.
The rate on the loan and low property tax and insurance means that they only needed $450 from us to cover those costs. So I lived here up until this year with my brother and they charged us $800 a month, so we each split it, $400 a piece.
Now that I live here by myself, I only pay $400, and they use the cash reserve to cover the difference. Since they don't really need the money, and are helping me save up money for a duplex out of state so that I can move closer to them.
Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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It is different to buy a condo for your kids to go to college vs them living there for who knows how long...
