How to start buying for my kids

[virgo]

Hiya

So, i have one more IP to buy before i reach the magic number...

Lately, i have been thinking that maybe it is time to think of buying on behalf of my kids (all 3 of them)

(I have visions of presenting each kid with one or two properties (with mortgage of course) when they get married .....)

My son is turning 18 soon....

As my hubby has very good borrowing capacity in the next few years, i am proposing:

1) Buy a property in both hubby and son's name, say 99% son and 1% father and father guaranteeing the loan.

2) Then when son holds down a permanent job, cop the stamp duty and the capital gains tax and then transfer the title AND the mortgage to son.

(I assume CGT my hubby has to pay will be based on 1%?? Pls confirm)

3) Rinse and Repeat for the next 2 kids


Would like to hear your Pros and Cons please....is there an easier way to do things?

(And please do not comment on letting children do it on their own so they will learn etc etc ... blame it on my culture)

 

[Ideo]

Can you adopt me?

 

[virgo]

Adopt

Can you adopt me?

Depends....Do you look like a young handsome Keanu Reeve? Both my sons do!

But seriously....

 

[mikezen]

My parents matched me and my brothers deposit, dollar for dollar

Then they guided us on how and when to buy in what type of market w value add potential

Then they assisted and directed us w renovating

Then they showed us how and when to sell and secure top dollar

We made a lot of money and they gave us skills that will benefit
Us for life , we were very fortunate and blessed to have such great parents

The process was gold and my life and views changed completely after we went through this

The whole process opened my eyes from beginning to end and its something I would defiantly teach my kids without a doubt

 

[virgo]

Great Parents

Well done Mikezen (or shd i say your parents...)

May i ask when did you buy your first property? Was it before or after you get your first job...

 

[D.T.]

Have you heard of trusts?

 

[virgo]

Trust

Hiya

As the redhead would say...please explain...i am not exceptionally bright...so a simple example would help enormously

(...would the trust wean the kids off the parents' ownership of the properties eventually and completely?)

 

[mikezen]

Well done Mikezen (or shd i say your parents...)

May i ask when did you buy your first property? Was it before or after you get your first job...

Thanks yeah kudos to my parents for sure

I had been working a while but never had very good money management habits, saving for the deposit then servicing the loan helped correct this, but I believe that is was the experience in finding the house, renovating, selling and realising the profit that was most beneficial, I had read many books and magazines in PI prior to purchasing , but it was the actual hands on doing it that seemed to benefit me the most and gave me the motivation to work harder, save more and educate myself to excel, but I guess we are all different,

All the best

 

[Colin Rice]

Lately, i have been thinking that maybe it is time to think of buying on behalf of my kids (all 3 of them)

Fantastic idea and I would like to do likewise, with conditions

 

[geoffw]

I think that you need to see if your kids have the skills needed first. By all means buy in their names. By don't give it to them until they have been able to save a substantial deposit or even buy a property for themselves. By handing them something on a platter you may not be doing the best thing for them in the longer term.

 

[VYBerlinaV8]

I have no plans for structured 'help' for my children. I want them to develop skills and ambition, and this probably won't happen with a big, soft safety net.

I'm happy to help when it's appropriate to do so. But they need to make mistakes, live lean and develop their own hunger for success first.

 

[D.T.]

I have no plans for structured 'help' for my children. I want them to develop skills and ambition, and this probably won't happen with a big, soft safety net.

I'm happy to help when it's appropriate to do so. But they need to make mistakes, live lean and develop their own hunger for success first.

Good on you

 

[chilliblue]

My parents paid the deposit and then went guarantor for my first property when I was 18. Worked part time whilst studying to pay the repayments.

When I found a fantastic deal but did not have enough to pay the deposit for the 2nd, dad made me sell my new car that they gave for my 21st. Apparently if I wanted the property enough, I should make sacrifices for it.

Life lesson learnt after having to drive an old bomb for the next 3 years.

 

[Nemo30]

i am proposing:

1) Buy a property in both hubby and son's name, say 99% son and 1% father and father guaranteeing the loan.

2) Then when son holds down a permanent job, cop the stamp duty and the capital gains tax and then transfer the title AND the mortgage to son.

(I assume CGT my hubby has to pay will be based on 1%?? Pls confirm)

3) Rinse and Repeat for the next 2 kids


Would like to hear your Pros and Cons please....is there an easier way to do things?

I'm not sure if this is the best way to do it, however it is similar to how my mum helped me.

I had no deposit and desperately needed to move due to a bad situation with a housing commission neighbour. She couldn't afford to give me money, but she used her house as security on a 100% loan.

The house was bought completely in her name (she was very worried about losing her house if something went bad). I paid the mortgage and all outgoings for the first 12 months after which I bought it from mum.

After 12 months the house had risen about $100k in price. I bought it off mum for the same price she paid plus her costs. The bank used the higher price as the valuation meaning I didnt need a deposit or have to pay LMI.

I had to pay stamp duty twice and CGT.

Worked well, however did put a strain on our relationship which was never quite the same. A few arguments over whose house it really was.

 

[Terry_w]

You have several options.

1. In your name and leave it to them in your will - directly or via a testamentary trust

2. Joint purchase. 99%/1% or 50/50. Leave your share in your will

3. Discretionary trust with you passing control over - maybe not good if they may want to live in it

4. Bare trust where you legally own it for them and transfer title at a later date. $50 stamp duty and no CGT if done correctly (like a SMSF custodian trustee).

5. Let them buy it with your help
- equity guarantee
- loan to them
- assist with income

Think about - death, divorce, incapacity and bankruptcy.