My coworker bought triplex with the hope her two adult kids will live there. Her daughter moved to another city and her son lives an hour away. The coworker rents out the other two units. It has been a great investment income that she was sending her kids to help them at different stages of their life
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ShawSon would absolutely not want to be a landlord. He is not getting enough sleep being the co-founder of a rapidly growing venture-backed startup and his wife has a very demanding job with big tech. They barely have time to open the packages they order from Amazon (they will stack up for days). I don’t think they spend a lot but I don’t think that augmenting income with rent is likely to meaningfully affect their lives.
ShawD on the other hand has been preternaturally adult since she started nursing school. She didn’t want to live in a dorm because the people were so immature and the food wasn’t healthy. She became a nurse practitioner rather than a doctor because she wanted to get on with her adult life and have kids earlier rather than later. She wants to nest and likes the idea of buying a house. She likes the idea of being a landlord. I would not say that she is handy like ShawWife (who has her own power tools), but she is practical and can learn. We’ll see if it works out but I am going to look with her.
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Buying a multifamily property for children is a fantastic investment, but my children don’t see the benefits. They all want their own space.
One of my friends bought a lovely multifamily home with a carriage house for her daughter. The daughter lives on the main floor and my friend rents out the other apartments and has the carriage house listed as a short-term rental. The daughter is the landlord/point of contact for all of the tenants. She cleans and prepares the short-term rental for guests and seems to derive a lot of joy from interacting with and directing tourists to places of interest.
Really, it’s a win for everyone and I wish my children were more on board with the idea. The daughter gets to live in a hip downtown neighborhood that she could never afford otherwise and my friend enjoys a nice return on her investment without a lot of hard work.
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We thought we had a ‘perfect solution’ to the housing cost dilemma in the Seattle area. We rent about an hour away, but are only there part-time (own a house in the Midwest). DD could not afford anything on her own. So, like Shawbridge, or Mountainsoul, we tried to encourage finding a multi family or MIL or DADU, and our rent help pay for the mortgage. Easy, responsible tenant. When we’re not in town, she could AirBnB the space for additional income. IF a MIL layout, DD could take over the entire space if needed in the future. Seemed like a perfect “win-win”.
Problem was finding something that was even affordable for two of us. Very few options available even 4-5 years ago. Now it is even worse. A wedding is also in the near future, so there are two to convince. It remains out of reach even with both their incomes, and understandably, they’re hesisant to have parents living downstairs 
.
Still looking though!
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Oh, do I have feelings about this.
I just sold a piece of property to a recent college graduate whose father took money from his 401k (he is over 59.5 yo) for the downpayment of 20%. Selling to these people was an absolute nightmare. The bank did not want to underwrite the loan and it only went to settlement because this was in late May, before interest rates were hiked in June. A committee had to meet to issue final approval and we were on pins and needles, expecting the deal to fall apart with less than 24 hours to closing. I had less difficulty selling to a subprime borrower with no money down in late 2007 than I did selling to this man child. They were also whiners while the bank was debating underwriting the loan or not. The father actually bribed an appraiser to lowball our house value in the hopes that a lower price would be easier to underwrite. When the bank found out about this, they paid for a second appraisal and my agent had to meet the second appraiser at the property to keep Daddy Dearest away.
The man kid texted us repeatedly after settlement asking us stupid questions that he should have been asking his parents- the sort of young adult questions that people living on their own for the first time have, not specific to this property.
Let your kid rent first. Give them the gift of letting them figure out how to adult. They can save up for their own downpayment and buy a property on their own without parental meddling. I have never seen a case where the parent paying didn’t feel that they had final say over the choice of property, and this is enmeshment in the highest order.
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What a nightmare. I hope you blocked his number!
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We helped with a down payment for one of our kids. We had absolutely NO say over the choice of property. The kid was already under contract when we offered to help. Kid could have purchased without our added help, but would have had a higher payment and PMI. We decided to gift him the money. The underwriters had no difficulty with this.
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Well I’d hope so! The rules have changed and the banks have a lot more hoops to jump through now (like they knew the appraisal wasn’t right so they had to fix it).
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We also had no say. Not our house. Not our choice/issue.
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Interesting read through on this thread. People with more than 2 children - it gets more difficult for many to help adult offspring with home purchase/gifting. Some have done a lot of financial assistance with college costs. Some have inherited money themselves, while some have had to be ‘on their own’ since 18 (paying back a monthly rate for college to spouse’s parents as one stated on this thread – which showed a lot of insensitivity on the people who then turned around and bought a bigger house…).
People are at different places on this thread - many are working, and even some are working past 65 for a variety of reasons. Some are very financially secure and feel great about helping with money towards a home/townhouse/condo - no strings attached; sounds like most are also comfortable that their adult offspring are making good adult decisions, living within their means, and being financially responsible.
DH and I are both 66, DH retired at 64 1/2, and I retired at 65. We moved 5X in 6 years - and then were able to settle in our current community (since 1983). We owned 3 prior homes in different cities, and built our current home in 1992. We only paid PMI in first 9 months of first home - and then took a company move – we bought 2 months after marriage, made money on all the homes, but also were dealing with higher interest rates on those 3 homes. The 2nd home sat empty part of a year, and we didn’t start building until after selling the 3rd home and moving into a rent house.
DH had some student loans (paid off before our first home purchase). His parents were able to leave a paid for house to DH/siblings, and small inheritance due to surviving parent only going into skilled care 2 weeks before dying. My parents were able to leave my siblings and me a decent inheritance due to dad being a good business man, good with his company, and good with his investment properties - and neither parent needing facility care/spending down assets. My parents paid for my college (I contributed what I had saved up going into college), and I earned money during summers and also a job on campus for my spending money. Parents also paid for a car for me (all siblings received a car at college graduation or sooner if necessary). DH and I shared this car until he bought a cheap used car to get to and from work in our 2nd home/2nd city. Only now we both own decent vehicles that are 2016 and 2018 models - we did buy a few new cars along the way (one was with employee discount due to DH’s job linked with this auto manufacturer, another was when new models came in and received 5 year 0% interest). We found a car model we like which both DDs and we drive.
DDs were born in 1994 and 1996. Both debt free from college. DD1 is married and expecting her 4th child (will be celebrating 6th anniversary this year - had children obviously close together with first pregnancy right away), with DD1 as primary income, and is a very busy working mom/demanding job. SIL has had a late start on his career, however if he had made career efforts in the city where they have lived, they could have purchased a reasonable home earlier in marriage. Instead their last rent increase was a substantial jump - but they will be moving soon after baby’s arrival for his career (and she will manage as SAHM with some spend down on savings, and thrifty lifestyle for a long while). It will be a long, long time until they are homeowners. We have put money into a start of college funding for each of their kids (so another college fund/investment account starting soon for #4). Not complaining about having the grandchildren - they are grand – a lot of my friends are longing for grandkids. However DD1/SIL will have a lot of years with changes and challenges. We give funds ‘equally’ to both DDs, so the money to the grandchildren accounts has equal money to DD2 who is single/no kids.
DD2 is interested in purchasing a home in her area, and will set that goal after she completes two short term goal and continues to save money. It has been ‘on her mind’ but now it seems a better time for that goal. DD2 has a fairly good sum in Roth IRA and it was started over 5 years ago, so this is a big help for her. I have a real estate friend in her area, so it will be shopping smart for a home which is planned to be a ‘forever’ home. One with a little bit of property, decent school district, and hopefully with good roof/HVAC and just needing cosmetic updating as she has funds to do so. Long term career with excellent company. She is currently renting a condo that is through a property manager, and below rental levels - her rent only went up $100/month last July. Her BF is long term, but he also has a slow start on his career (Covid hurt for a while), and is moving around with eventual (enough) experience to gain the right job in her area.
Lots of good comments on this thread on townhouses/condos/homes with HOAs. It all depends on location and lots of other things. One hopes to never lose money on a property if held long enough, but that does happen.
DH never wanted to be a land lord, but he does have handyman skills (and general skills) - which has been put to use with DD2’s moves and some fix up items. @sevmom before your kids take out the kitchen appliances in the basement apartment - if the basement has a separate entrance, and they can hire a property manager (fee often about 10% and they handle leasing/screening tenants) – after taxes (from rental income) and property manager fees, can use the rest of the cash in to build up investment funds. After they are in their place a little while, have them think about this. However if it is just something they don’t want, that is their choice. Just something more to think about.
Thanks. They definitely want the appliances out and don’t want tenants. They want the area as more useable living space for themselves. Their realtor told them it will increase the value of the property to remove the appliances, but they would have done it anyway. I saw the house over the holiday, and agree with them that removing the kitchenette will improve the look of the home. It’s a nice rowhouse in a sought after area of DC, so the value should hopefully increase. They will buy a bigger home a few years from now. It is not meant to be their “forever” home.
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Our help is with the down payment, D and SIL are choosing their home, getting financing, and will pay the mortgage. They have a budget and know where they have to be. This home won’t put them in jeopardy of being able to have fun, make the payments, have a life.
H & I are thrilled that they’re doing it all themselves. Not our home, not our decision.
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Same here.
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I bought my first home and had a down payment from a small inheritance from my great grandfather and it made a huge difference to me and my husband. My kids are only 17, but as a real estate attorney, I see the advantages of buying and not paying PMI, so we plan to help with a down payment. Each of our kids has an investment account that we add a little to every year with the hope that, by the time they are ready to buy, there will be enough for a down payment and no need for a gift letter or other explanation of the funds. Without help, with current price escalation, I am not sure how they can buy right out of school without assistance. If either of my kids chooses a school with low tuition and where most students live off campus we would evaluate whether buying a condo and renting rooms to roommates made financial sense. We know people who have done this and it has been a good investment.
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@anon87843660 That sounds like a nightmare! Some people are just so difficult to deal with!
We can’t afford to help our kids with a house purchase or down payment, so that’s something they’ll be dealing with on their own.
Yes! So many different scenarios! Maybe if houses were cheaper or we didn’t pay for college, we would help with a down payment…oh well, when my kids do it, it’ll be on their own like most people…
Do they need to buy right out of school? I don’t know anyone, even back in my day when houses were cheaper who bought right out of school, unless they were already married with kids on the way soon.
Yes, owning is better then renting, but if people don’t have the money to buy or parents don’t have the money to help…then what do they do? I think we also need to make things better/affordable for renters in this country too…
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They don’t need to buy right out of school. Pressuring your kids to buy right out of school by offering them money is indeed pressure of the highest order. If they come asking after living as adults for a while, different story.
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Yes! So true! Plus, the few years right out of school can be uncertain for graduates…
And in most cases, recent college grads haven’t built up the savings needed to pay for home ownership, so the parents would be contributing a significant amount of money in most cases. If I was helping with a down payment, I’d want to make sure my kid could afford to make most of the payments…
I agree they don’t need to buy right out of school. I did, and it worked out well. For many people, it is a sound investment, especially if they plan to stay in a location for several years. Every person’s scenario is different, and the funds we have put aside don’t need to be used for a down payment, but it could be. Or it could be used for grad school or business start up costs or whatever makes sense for them.
We were 37 and the guys were in elementary school when we bought our first house! H’s student loans, day care, rent in a high COL area and no assistance from parents meant it took a while to save. We also didn’t want to drain our savings for the down payment, because you never know what disasters might happen (and that happened to me, four years later).
S1 didn’t need our help with a down payment. Not that whatever we could contribute would have been more than spit in a bucket!
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We were also 37 or so when we bought our first house. We did drain our savings…but we had no other debt. After the closing on the house, we had enough money left to buy the cheapest washer and dryer the appliance store had. I think we had less than $100 left once we were done.
We did receive fairly generous housewarming gifts from our parents…so we had furniture to sit on!
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