Can we talk about parents buying their adult children luxury homes

[Anonymous]

Anonymous wrote:Honestly, if the parents are planning to leave substantial inheritances to their kids after they die, it’s probably better for them to gift it to them earlier in their children's lives when it will make a difference. Buying them a house is a totally reasonable thing to do if that’s the financial situation they’re in. And giving their children the flexibility to stay home and raise their kids if their kids want to chose to do that is a much better use of their money than waiting until they die and passing it on to retired children who have worked and possibly struggled their whole lives.

It is better to give eith a warm hand than a cold hand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

Did you pay your parents back the initial sum they gave you from the equity? I can’t imagine just keeping such a large sum of ‘help’ if I was able to pay it back. Dh and I did the normal scrimp and save for our first starter home and built our own equity. It’s much more satisfying knowing mommy and daddy didn’t do it for us.

+1 completely agree. I feel like it would be embarrassing and infantilizing to accept so much money for a house when you could afford one on your own, just not an 800k one

PP here.

What is and isn’t infantilizing really depends on your culture and social group. This kind of help is incredibly common among my peers.

It wasn’t a big deal for my parents to give us 150-200K for a down payment. They also gave us 50K for furnishings, and paid for our wedding, and paid for graduate school, and are funding our kids’ 529s, etc.

There are a lot of people who are not trust fund wealthy but still wealthy enough to get significant help from their families.

[Anonymous]

We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

[Anonymous]

Anonymous wrote:Tax the shit out of it. This is what privilege is.

I had no privilege in life, including my skin color, so do not try that card.
I worked my butt off to get to a top tax bracket and pay an enormous tax. Because you are a slacker doesn’t mean I should subsidize you even more. My income and assets can easily be sheltered so you can’t “tax the shit” out of them.

There is a correlation between smarts and people with wealth and vice versa, as you well demonstrate.

[Anonymous]

Anonymous wrote:We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

Well done, PP

[Anonymous]

Anonymous wrote:

I will say helping your kids get their first true starter home (a townhouse, condo, etc) is one thing. But and $800,000 home is not that and even in this area (suburbs) is a pretty decent home. Perhaps the parents feel guilty that their kids obviously are not good with money, I don't know.

OP, just know that you can actually get there on your own (my husband and I did) but it takes a bit longer and being smarter.

My parents did end up gifting us a large sum of money later that we have since invested for the future - so I am not criticizing generarational wealth. The difference will be that your friends will probably NOT have their own wealth to pass on, where you will.

So you think the $800k house will not appreciate bit OP’s $300k house will?

Housing appreciation is one of the major means of wealth transfer in the US

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think this is a "trend" per se, it's just parents giving their children what they can afford. In your instance, you are hanging out with people whose parents can afford to help with $800+ homes.

This is very common in other parts of the world. The childhood home I grew up in (not here) was given to my dad by his parents.
My DC are preschoolers now, but when the time comes, if I can afford to do it, I will absolutely help with housing.

Sure, I think it's one thing to help with housing, it's another to put them in a home they would never get close to be able to afford. Forgetting even just the principle and interest on these mortgages the property taxes and maintenance alone on these houses would take a chunk out of their salary.
There is also the matter of what others in their circle think or know of them. I feel like this is almost a face saving or vanity measure for the parents. Yeah my kid only makes 55K but if I put them in a 800K house nobody will think that, they'll think they're "winners" just like me.

I don't see why that matters. DH and I received no financial help from our parents towards housing, but many of our friends did. I'm happy for them and don't judge them for living in a house they couldn't afford to live in without help.

Agree. Unfortunately, with Biden's inflation seems like we will all need to help our kids with housing at this rate.

🙄🙄🙄

I'm a Democrat, and I support many of Bidens programs. But if they pass trillions in infrastructure spending, with the government competing for resources with private capital, there will be severe inflation, despite what the talking heads tell you.

[Anonymous]

I would do the same for my kids given the chance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

Well done, PP

We did the same, and we help our parents, but I do not begrudge those who came into their money before we did, and if we are in a position to do so we will help our kids toward their own financial independence.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think this is a "trend" per se, it's just parents giving their children what they can afford. In your instance, you are hanging out with people whose parents can afford to help with $800+ homes.

This is very common in other parts of the world. The childhood home I grew up in (not here) was given to my dad by his parents.
My DC are preschoolers now, but when the time comes, if I can afford to do it, I will absolutely help with housing.

Sure, I think it's one thing to help with housing, it's another to put them in a home they would never get close to be able to afford. Forgetting even just the principle and interest on these mortgages the property taxes and maintenance alone on these houses would take a chunk out of their salary.
There is also the matter of what others in their circle think or know of them. I feel like this is almost a face saving or vanity measure for the parents. Yeah my kid only makes 55K but if I put them in a 800K house nobody will think that, they'll think they're "winners" just like me.

I don't see why that matters. DH and I received no financial help from our parents towards housing, but many of our friends did. I'm happy for them and don't judge them for living in a house they couldn't afford to live in without help.

Agree. Unfortunately, with Biden's inflation seems like we will all need to help our kids with housing at this rate.

🙄🙄🙄

I'm a Democrat, and I support many of Bidens programs. But if they pass trillions in infrastructure spending, with the government competing for resources with private capital, there will be severe inflation, despite what the talking heads tell you.

Much better to continue to ignore infrastructure- the crumbling bridges add character to the landscape and the laughable fiber networks are quaint

[Anonymous]

Anonymous wrote:

Anonymous wrote:Tax the shit out of it. This is what privilege is.

I had no privilege in life, including my skin color, so do not try that card.
I worked my butt off to get to a top tax bracket and pay an enormous tax. Because you are a slacker doesn’t mean I should subsidize you even more. My income and assets can easily be sheltered so you can’t “tax the shit” out of them.

There is a correlation between smarts and people with wealth and vice versa, as you well demonstrate.

DP. I also have a rags to riches story. Your or my children have done absolutely nothing to merit the privilege that comes with inheriting large amounts of money. They would be in fact welfare recipients. I'd rather a system where a large portion of inheritances went into a pool that funded scholarships, research, infrastructure. Let the cream rise to the top in each generation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know it's not new for parents to help their adult kids out with their first home financially but the number of parents I know buying their adult kids luxury homes is astounding. Has this become a new trend? I recently reunited with a few old friends from high school (we are now all in our early 30s and yes we grew up in expensive homes in a HCOL area) and a number of them have managed to buy 800K plus homes with their parents co-signing the mortgage because they would never be approved for it on their own. These people include a lawyer who put out a shingle and ekes out 65k a year, a friend who went to dental school and has the loans to prove it but upon graduation got married and pregnant and never practiced while her husband is a middle school teacher and an HR assistant at a fortune 500 company making 55k a year. I get helping your kids but why buy them such expensive houses when there salary would never justify it?

Maybe the HR assistant bought $1000 of Etherium in December 2016 and paid for the house in CASH. You assume a lot and have a toxic jealous mind. you should focus on yourself and not worry about the financial circumstances of others. It isn't healthy

They've openly admitted to their parents co signing so there's no assumption there. There is no jealousy here, I personally would not allow for my parents to co-sign a jumbo loan for me in my 30s. I just find it infantilizing and you'll always be beholden to your parents for their financial help rather than growing up and being an adult.

You may believe that, but it actually isn't true.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tax the shit out of it. This is what privilege is.

I had no privilege in life, including my skin color, so do not try that card.
I worked my butt off to get to a top tax bracket and pay an enormous tax. Because you are a slacker doesn’t mean I should subsidize you even more. My income and assets can easily be sheltered so you can’t “tax the shit” out of them.

There is a correlation between smarts and people with wealth and vice versa, as you well demonstrate.

DP. I also have a rags to riches story. Your or my children have done absolutely nothing to merit the privilege that comes with inheriting large amounts of money. They would be in fact welfare recipients. I'd rather a system where a large portion of inheritances went into a pool that funded scholarships, research, infrastructure. Let the cream rise to the top in each generation.

And the wealthy who have disabled children?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think this is a "trend" per se, it's just parents giving their children what they can afford. In your instance, you are hanging out with people whose parents can afford to help with $800+ homes.

This is very common in other parts of the world. The childhood home I grew up in (not here) was given to my dad by his parents.
My DC are preschoolers now, but when the time comes, if I can afford to do it, I will absolutely help with housing.

Sure, I think it's one thing to help with housing, it's another to put them in a home they would never get close to be able to afford. Forgetting even just the principle and interest on these mortgages the property taxes and maintenance alone on these houses would take a chunk out of their salary.
There is also the matter of what others in their circle think or know of them. I feel like this is almost a face saving or vanity measure for the parents. Yeah my kid only makes 55K but if I put them in a 800K house nobody will think that, they'll think they're "winners" just like me.

I don't see why that matters. DH and I received no financial help from our parents towards housing, but many of our friends did. I'm happy for them and don't judge them for living in a house they couldn't afford to live in without help.

Agree. Unfortunately, with Biden's inflation seems like we will all need to help our kids with housing at this rate.

🙄🙄🙄

I'm a Democrat, and I support many of Bidens programs. But if they pass trillions in infrastructure spending, with the government competing for resources with private capital, there will be severe inflation, despite what the talking heads tell you.

Time for some corporate margins to shrink, and no you are not being "squeezed" if your margin goes from 30% to 25%. Lots of businesses have taken advantage of the eroding power of the labor force for decades.

[Anonymous]

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

God, I'm so tired of these worthless adult children who cannot manage to eke out a living for themselves. It's so infuriating. My younger brother is the same way and it's definitely a generational crutch. I don't know how the boomers allowed their kids to make it into 30s and 40s while still supporting them. These "kids" are such a drain on the workforce because they cannot actually do things for themselves. They have no residency, no ingenuity, no resolve. They simple just ask mom and dad to open up their wallets and all their issues solved.

This is precisely why in hiring I look at where these kids went to HS. I want to know if they're part of the man-child class of kids who grew up with substantial wealth and privilege and are unable to leave the nest and make a living on their own. I don't want that class working for me.
Parents, we must do better by our kids. I know it's hard, but teach them how to make it themselves. Your kids will learn a lot through hardship. Even if you can afford more, make them work for it themselves. They will thank you for it in the end - and so will society.