Anonymous
09/07/2022 16:34
Subject: Re:Buying Property for Young Adult Children
My parents bought a home for my sister; sister lived in it and paid mortgage and taxes, paid for renovations, etc. However, it ended up being very difficult for my sister to assume ownership. My parents thought she'd be able to just take over the mortgage in her own name, but in a typical mortgage when the property changes hands the full amount is due.
Unless the goal was to keep the house as a rental property after my sister moved out, it would have been better for my parents to give my sister the down payment as a gift, than to buy the property in their own names.
But, buying it as they did was better than my sister renting during all that time. She eventually took title to the property with her own mortgage and then sold it for a nice profit, although she was the legal owner for such a short period that she had capital gains issues.
Unless the goal was to keep the house as a rental property after my sister moved out, it would have been better for my parents to give my sister the down payment as a gift, than to buy the property in their own names.
But, buying it as they did was better than my sister renting during all that time. She eventually took title to the property with her own mortgage and then sold it for a nice profit, although she was the legal owner for such a short period that she had capital gains issues.
Anonymous
09/07/2022 16:28
Subject: Buying Property for Young Adult Children
Anonymous wrote:Anonymous wrote:Our in-laws lent us down payment for our first house and had us sign papers it was loan. Our bad in that there were no specific terms discussed other than don’t repay until
You can refi after appreciation. When we refinanced two years later and asked amount to repay they decided it was only fair to calculate ‘what they would have gotten if that money had been invested’ - calculated using an above market return. Again - our bad we didn’t get details. Foolishly assumed they’d match market mortgage rate or honestly give us a deal. (They are very well off.)! Yes - helped us get foot in door on nicer house than we could have afforded but left really bad feelings in my mind. DH not phased but I would not use my kids as easy marks to make $$$. In the end we would have done better getting lesser house at good mortgage and cashed in equity and moved.
Right after the wedding, my mother and father in-law, bought DH and I a brand new 2M+ SFH and they paid off the mortgage in cash. We only have to pay the property tax on the house. They are such wonderful people. They also gave us 500k for DH and I to start our new life together. Not that it makes any difference but I am white and DH is asian. They always treat me as if I am their own daughter.
I’m also white with an Asian DH and the amount of cash support from his parents is mind blowing to me. I do well for myself now making $300k+ but I come from a lower class family that has never had much money to speak of and certainly doesn’t think the best use of it is to set your kids up with a head start in life - the culture is it’s morally correct to make your kids earn their own way. That attitude is maladaptive in the current economic structure and i will not be propagating it to my kids.
Anonymous
09/07/2022 16:20
Subject: Re:Buying Property for Young Adult Children
Anonymous wrote:Anonymous wrote:to the person, above, whose in-laws bought them a 2M+ home after the wedding, and gave the dh (their son) 500k, how do you do this and avoid taxes?
taxes are paid by the gift giver, not the recipient, and the lifetime gift tax exclusion for givers is very high. Like $11 million or so.
+1. Not an issue for most.
Anonymous
09/06/2022 15:08
Subject: Buying Property for Young Adult Children
I know families where the parents bought a small NYC apartment with the idea that kids would live there and pay below market rent while young and getting established and then it would be a pied-a-terre for the parents later. In this case the parents picked out the apartment/neighborhood and kids could agree to live there or rent in some hipster part of Brooklyn and pay their own way. In some cases this worked well, in other cases it may have contributed to failure to launch.
Anonymous
09/06/2022 12:33
Subject: Re:Buying Property for Young Adult Children
Anonymous wrote:to the person, above, whose in-laws bought them a 2M+ home after the wedding, and gave the dh (their son) 500k, how do you do this and avoid taxes?
taxes are paid by the gift giver, not the recipient, and the lifetime gift tax exclusion for givers is very high. Like $11 million or so.
Anonymous
09/05/2022 12:25
Subject: Re:Buying Property for Young Adult Children
to the person, above, whose in-laws bought them a 2M+ home after the wedding, and gave the dh (their son) 500k, how do you do this and avoid taxes?
Anonymous
08/22/2022 19:48
Subject: Buying Property for Young Adult Children
"Buy them" does not mean YOU pick it out.
Anonymous
08/22/2022 17:15
Subject: Buying Property for Young Adult Children
Anonymous wrote:Our in-laws lent us down payment for our first house and had us sign papers it was loan. Our bad in that there were no specific terms discussed other than don’t repay until
You can refi after appreciation. When we refinanced two years later and asked amount to repay they decided it was only fair to calculate ‘what they would have gotten if that money had been invested’ - calculated using an above market return. Again - our bad we didn’t get details. Foolishly assumed they’d match market mortgage rate or honestly give us a deal. (They are very well off.)! Yes - helped us get foot in door on nicer house than we could have afforded but left really bad feelings in my mind. DH not phased but I would not use my kids as easy marks to make $$$. In the end we would have done better getting lesser house at good mortgage and cashed in equity and moved.
Right after the wedding, my mother and father in-law, bought DH and I a brand new 2M+ SFH and they paid off the mortgage in cash. We only have to pay the property tax on the house. They are such wonderful people. They also gave us 500k for DH and I to start our new life together. Not that it makes any difference but I am white and DH is asian. They always treat me as if I am their own daughter.
Anonymous
08/21/2022 12:50
Subject: Buying Property for Young Adult Children
Our in-laws lent us down payment for our first house and had us sign papers it was loan. Our bad in that there were no specific terms discussed other than don’t repay until
You can refi after appreciation. When we refinanced two years later and asked amount to repay they decided it was only fair to calculate ‘what they would have gotten if that money had been invested’ - calculated using an above market return. Again - our bad we didn’t get details. Foolishly assumed they’d match market mortgage rate or honestly give us a deal. (They are very well off.)! Yes - helped us get foot in door on nicer house than we could have afforded but left really bad feelings in my mind. DH not phased but I would not use my kids as easy marks to make $$$. In the end we would have done better getting lesser house at good mortgage and cashed in equity and moved.
You can refi after appreciation. When we refinanced two years later and asked amount to repay they decided it was only fair to calculate ‘what they would have gotten if that money had been invested’ - calculated using an above market return. Again - our bad we didn’t get details. Foolishly assumed they’d match market mortgage rate or honestly give us a deal. (They are very well off.)! Yes - helped us get foot in door on nicer house than we could have afforded but left really bad feelings in my mind. DH not phased but I would not use my kids as easy marks to make $$$. In the end we would have done better getting lesser house at good mortgage and cashed in equity and moved.
Anonymous
08/21/2022 12:31
Subject: Buying Property for Young Adult Children
Parents paid the down payment on my first apartment, I was responsible for both mortgage and maintenance. After I sell it, I plan on repaying the full amount + profit.
Anonymous
08/21/2022 12:22
Subject: Re:Buying Property for Young Adult Children
First, adult kids found a property they could get pre-approved for a mortgage on. Then we paid all closing costs (including the minimum down payment). Other than transferring the money, presenting a gift letter, telling our tax accountant about the gift, we were out of the picture.
Anonymous
08/21/2022 12:15
Subject: Buying Property for Young Adult Children
My parents gifted me a large portion of the downpayment for my first home. It was such a blessing and set me up down the road to be able to climb the property ladder and afford bigger and better when the time came.
If I were to do similar for my children down the road, I would get them a duplex or 2+ bedroom place where someone else could pay a large portion of the mortgage.
If I were to do similar for my children down the road, I would get them a duplex or 2+ bedroom place where someone else could pay a large portion of the mortgage.
Anonymous
08/21/2022 12:10
Subject: Buying Property for Young Adult Children
Np, and I was just coming out to start a similar thread. I am strongly considering purchasing a condo for my two young adult sons, but I'm unsure of the best approach. I was thinking to have them pay the monthly HOA, which also covers the utilities and I pay the mortgage.
Anonymous
08/20/2022 18:23
Subject: Buying Property for Young Adult Children
My parents helped with the deposit on my first apartment. They didn't pay the mortgage and when I sold it, for a huge profit, I repaid them.
Anonymous
08/20/2022 16:37
Subject: Buying Property for Young Adult Children
Please share your experience with buying property for your young adult children to live in, either paying rent or rent free. Did you end up transferring ownership to them at some point, or did they move out on their own? Were there any particular legal issues that you had to deal with?