Is this the future of buying? Buyers agent Chris Gray of Empire said buying with parent’s help was going to become much more common.
“I did it with my parents back twenty odd years ago and it’s going to be more and more likely to happen every year because property is getting more expensive,’’ he said.
“Our parent’s generation made a lot of money from property and they generally use some of that equity to help their kids.”
“We have clients who help with deposits and others buying for their kids even when they are five years old, they know it is a $1 million property now so when the kids are 20 it will be $2 million or $3 million.’’
Mr Gray said the majority of parents did not want to give the money away, but were happy to lend it to assist their children, so organised schemes ensured all the legal paper work was in place.
Even if not going through an organised scheme, Mr Gray advised formalising the agreement between parents and children was important.
“If you do it directly (with your parents) go through a solicitor and get some bullet points of what you agree and document all of these things in advance,’’ he said.
Chris Gray of Empire Property said even his parents helped him get into the market 20 years ago.
Mr Gray said basically it was really just a joint venture and that happened in business every day so there was no reason it couldn’t happen with property.
His tips for those going it alone with their parents are:
1. Get it done on paper.
“You have got to put the basic numbers down on paper, the rent, the mortgage. etc,’’ he said.
2. Be clear about who is contributing what.
“Everyone needs to be 100 per cent clear on who is putting what money in and how rents and profits are split.
3. Work out the worst case scenario.
How you will handle the money and asset if you end up hating each other and not speaking? Nobody thinks this will happen but it can. Put in writing what will happen if the worse case scenario happens, so lawyers don’t have to become involved and everyone knows the exit strategy.
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