The answer to this question depends on the situation. Even if some say that going into business with family is not ideal, helping out when needed is a bit different. Most young adults can’t afford an average home, so a bit of help is more than welcome. However, assistance should only be provided if the adult children are trustworthy and understand the ramifications. So, let’s talk a bit about the implications of buying a home for your adult kids and whether it is a good idea. Ask yourself the following questions, and you will have your answer.
Are the kids responsible enough?
Getting a loan could be the only way you can afford to buy a home for your kids. If you are thinking of gifting them the money, the story ends there. On the other hand, if you are loaning the money to your children, you should ask yourself: is it a good idea? To answer this question, you should look into your children’s financial status. You might consider a loan if they have a steady income, pay their bills and rent on time, or are generally responsible. Otherwise, you risk ending up paying their bills and being financially unstable yourself. Therefore, don’t endanger your wellbeing just to help your kids out. They should learn about responsibilities and the value of money.
Can they afford the house you are buying?
We are asking this question because the financial implications of owning a home might be overwhelming for inexperienced young adults. Taxes, bills, mortgage loans, insurance, repairs are just some examples of regular expenses in a household. If your kids never had to pay them before, having to deal with them all of a sudden can destabilize them financially. Therefore, before buying a home for your adult kids, talk them through the implications and costs of owning a home. If they are ready for such responsibilities and their income can cover the expenses, you can buy the house. If not, maybe it’s wise to wait until you can be sure that they are fully prepared.
Can you afford to buy them a home?
As parents, we are prepared to do anything it takes to help our children in life. Sometimes, we might even put ourselves aside and focus only on their needs. As much as this sounds reasonable for any parent, it’s not always a good idea to do so. If you are saving for retirement, for example, you should keep that money for that purpose. If you spend it on your child, it might cause you financial instability later. The same goes if you need to take a loan to buy your adult kids a home. You might afford it now, but you never know what the future will bring. You need to be financially prepared to buy a house, both now and in the future. Instead of spending money that you don’t have, seek financial advice. There might be other ways to help your children own a home.
How is your child’s relationship with their partner?
This is a question you may not consider, but it is just as important when you are thinking of buying a home for your adult kids. And, the answer can help you decide if it is a good idea or not to make that big of an investment. If your child is single but financially stable and responsible, they could be able to support themselves. If they are in a steady relationship or married, the maintenance costs will be shared with their better half. They might need some help now and then, especially if they have an expanding family, but that wouldn’t be unusual. Just make sure that your child is in a stable relationship that has a future. If they get divorced, the house needs to be split with their partner. As a result, your child will only benefit from half of your investment.
How else can you help your adult kids?
Besides providing them with a home, you might need to give them a hand before and after the move-in. If they need to move out of your shared home, assist them in finding the best moving company. Also, you can help them pack and get ready for the big day. If they need to relocate from a rental, help them leave the rental without breaking the bank. They will need all the money they can get for their new home. Therefore, getting the security deposit back should be a priority. You can assist them with the repairs that might be needed and with the cleaning of the place. When they move into their new home, give them a hand with the unpacking, cleaning, and settling in. They will appreciate having someone to help them throughout the process.
Pros and cons of buying a home for your adult kids
If you buy a house for your children, they will have a significant advantage. Because of more experience, you know how to negotiate, avoid scams, or bad investments. For you, being able to put a brick on the foundation of your child’s future will be a great reward. Moreover, there are mutual benefits if you decide to loan them the money for the house. You made a long-term investment, and they can pay it back in the time you agreed on. On the other hand, making such an investment can cause you or your children financial instability, especially if you are not prepared for such an expense, and they for such responsibility. Also, making your children rely too much on your help can cause them more harm. If they become too dependent on you, they will never learn how to be self-reliant.
Buying a home for your adult kids is a great act of love. But, you shouldn’t do it without asking yourself some questions first. For example, can you afford to buy a house, and can your kids afford to live in it? Furthermore, if you choose to lend your children the money for the home, are they responsible enough to pay it back? If the answers to all of these questions are satisfactory, you can buy the house without hesitation. If not, maybe you should find other ways of helping your kids buy their own homes. After all, this is not a parental obligation.
Virginia Mathis is a part-time blogger and full-time mother of three. During her career, she has worked as a real estate assistant and now she uses her knowledge for inspiration for her writing.