How to Help Your Children Into Property
Times have changed. In the ‘olden days‘ it was easy. You left school, got a job, saved hard for a deposit, bought your first home (which was often your last home), had a family, brought them up, paid off the house, downsized, spent the kids inheritance, then died.
Ahh… life was so simple then. In those days you didn’t expect your parents to buy you a home…. or even help you buy one, you just expected to repeat the cycle, and do the same thing yourself.
Then came……THE MILLENIALS!! Is it just coincidence that “Aliens“ fit perfectly into “Millennials”?
These days this pampered new breed of humanity reckon that you brought them into this world and you should take them out of it in the style that they would like to become accustomed to, as well as keep them in it for their ENTIRE LIVES! It is no longer adequate to feed, clothe nurture, love, support, educate and sponsor them until they have reached the prescribed adult age. Oh no! NO! No!…these days it must go on forever, and part of the new programme entails providing shelter for their entire future and let this not be sub-standard! This must be at least equal but preferably way in excess of what they had to suffer through whilst growing up – and they are not going to wait for it.
So what are you going to do? Say no and be cut off for life apart from babysitting duties? No, unfortunately we are all too weak and subservient for that – we have to take what’s coming – gather together our lifetime savings that we were hoping would give some light relief in our latter years and dedicate it to… a house for the children! In all fairness, buying a first home these days is a lot more difficult than it used to be – it can rarely be bought for three times your annual salary that used to be the norm back then so where parents can help their children into property, it is a very good thing.
See more of 16C Stamford Street, Leederville
So, now given this is your destiny – be smart about it. Buy it (or them) early on while you are still working and at least use some of the taxman’s dollars to buy it – this is called negative gearing and it means that the difference between what you bring in for rent and what you pay out in mortgage payments and expenses is tax deductible.
If you are in a high paying job and pay a lot of tax you would probably be wise to buy an old house on a very nice piece of land so that the difference between your income and outgoings is large and you can claim a lot of tax back.
If however you have a moderate income you may be more inclined to buy something smaller – like a unit where there is no huge difference (this is called neutrally gearing) but have someone else (your tenant) paying it off for you.
Now you hold on to these properties for as long as possible – buy and hold! Buy and hold! Don’t jump
in and out of property – it’s very expensive! Eventually you’ll find that you own multiple properties that other people have paid off for you which all have equity in so that you can at least ‘help’ the children into their new property or you can move them into one of them when they have reached their ‘use by date’ in the main house.
So, the earlier you start ‘collecting’ property, the more you’ll have later to offer up to the sacrificial progeny and the more chance you will have of a peaceful transition and harmony of relationship in your declining years – So, go on, be a sport and “do it for THEM!”
Source: How to Help Your Children Into Property, Western Suburbs Weekly, Residential – 15 August 2017.