At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
In today’s blog post we are going to be talking about how you can help your kids into their first homes by investing with them.
What is the best way to help my kids into their first home?
Property prices are just ridiculous and it is incredibly hard for first homeowners to get into the property market.
What we suggest, is that a parent invests in a property with their children.
Invest within the budget
A great example is a child may see a beautiful house that they like. It’s a four-bedroom, double garage with a nice yard. It’s their first home and it’s around $1 million.
“Mum. Can you help me with the deposit for this house?”
We would suggest that they look for something that was within their means for a first home and more realistically within their budget.
How would it work?
If you have a house that’s worth $600 – $700K, and you’ve got to come up with a deposit of a hundred thousand dollars, you could buy a portion of that house as a parent.
If you have handed the money over, you own a portion of that house, which is in line with the contribution that you make to the deposit.
The children borrow the money, take the mortgage, pay the mortgage back, and they learn how the real world works.
When it’s time to upgrade in 10 years’ time or the house is sold you get your initial investment back, plus any capital gain that you and your children have earned.
Invest together and Teach good life lessons
By investing together you are helping them to get onto the property ladder, you’re teaching them good financial skills, rather than just handing over the money, and you’re getting a good investment.
That’s a wrap
So what do you think? Will you be helping your kids to get onto the property ladder?
If you need any financial help or advice please get in touch with us at Super-Advice.
