Hi
i would like to set my kids up when they reach 21 approx 10 years to go for each to reach that age .
How to start is the question ie try and buy near where we live or rather look for property further a fieldmkofsky
Hi mkofsky
I decided to do the same for my 3 children a year ro 2 ago although mine are a little younger being 7,9,11.
I purchased a block of 6 x 2 bedroom units which i strata titled and refurbed 3 and paid down the debt on the other 3 to next to nothing.
I now have the 3 units in Trust one for each of them and whilst i have Tax to pay on the profit of the first 3 there will be no arguing as to who has a better unit or whose is bigger as they are identical and all on the top floor.
Buying 3 houses separately you need to decide up front who is whose and thats when arguements could occur.
Cheers Richard
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Richard,
Can I just ask for a little more step-bystep info about how you did this?
Sounds like you bought the block of 6 units on one title.
You said you converted to strata and then did you transfer 3 titles into the Trust and keep the 3 titles for othe ones you refurbed?
After the refurb did you have the refurbed 3 units revalued and pull out the extra equity and place longer term finance on each individual title at that point – just not sure of the mechanics of how that would have worked.Thanks,
skippygirl
Hi mkofsky,
That’s a great thought for your kids, it would be nice when they are older and really appreciate you for it.
One way of looking at it is to get them identical properties so no issues occur, the fact is there are always issues that will occur either way, and I’m not sure how possible it is to find identical properties in your area ect..
My thoughts are to start investing yourself where you are likely to get great growth with minimal holding costs not necessarily in your area but anywhere that will provide you with financial freedom to be able to provide your children whatever you please in due course.
Happy to help.
Roy H.
L.R.E.A., Dip FS (FP)Guardian Property Specialists (GPS) is a research-focused company that specialises in sourcing and providing residential investment properties Australia wide!
My kids will get plenty of financial education and a heap of ongoing unsolicited advice. They’ll probably get some assistance with a deposit at a below market interest rate. And I’ll no doubt give them a hand with some painting.
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http://www.depreciator.com.auhi there mkofski
Sorry i cant offer any advice relating to the specific question but I cant help saying that i agree with Richard.Education is teh best thing you can give your kids. I play the board game ‘cashflow for kids’ with my 4. The eight yr old told me the other day when i said I had no money to buy him some lollies that we need more ‘passive income’.He didnt learn that at school!
What do we learn when everything is given to us on a platter? I am a firm believer that it is through the struggle,whether it is learning to sail or buying your first crappy 2 bedroom shack that we learn the most and appreciate what we have accomplished on our own.
And ok I admit I’m a cynic but I rekkon with my 4 kids, one might actually appreciate getting a free house and use it to full potential. Another of the kids will probably gamble it away, another will sell up and go travelling and another will have a messy divorce in which he/she ends up losing teh house. If i had a fifth kid, they’d prolly be the junky and it all would go up in smoke.
Anyway I am sure you have wonderful children and none of the above applies but I thought I’d throw it in just as a consideration.
goodluck on your ventures
milly“And ok I admit I’m a cynic but I rekkon with my 4 kids, one might actually appreciate getting a free house and use it to full potential. Another of the kids will probably gamble it away, another will sell up and go travelling and another will have a messy divorce in which he/she ends up losing teh house. If i had a fifth kid, they’d prolly be the junky and it all would go up in smoke. “
[laughing] Funny, Milly! [biggrin]
But seriously, I won’t be helping out my children in such big doses of financial medication before they need it.
Yes, if and when they need it, and IF I think they are ready and responsible enough, I wouldn’t mind helping out with deposits (or part of deposits depending how big the deposits are and how my own finances are at that moment) as gifts to start them off, or with an interest-free loan, but I expect them to be finacially responsible by the time they are ready to leave home.
If they have a job and can’t manage paying off a home, then they will be renting. That’s life.
If they don’t have a job and want to leave home, they will need to get a job to support themselves. That’s life.
If they can’t cope and think life is unfair, I will be there to support them emotionally. [chill]
Am I a mean mother?
No way. I will always be there for my kids.
If there are ‘needs’ to be filled, I will be there to fill them when I can.
But where the ‘wants’ come into the picture, they got to sort themselves out.It is important to me that they learn to be self-supportive.
In no way I am criticising the way others are helping out their kids. Every family is different. Just saying how I look at it to suit my own family.
So to answer your question: “How to start is the question ie try and buy near where we live or rather look for property further a field“
My answer simply would be:
You do not need to start at all.
Perhaps just keep investing for yourself and if it makes you feel good, make sure you have a deposit ready (e.g. in equity) by the time you feel you want to help out your kids buying their own home- of their own choice. This would be a lovely ‘leaving home’ gift.
If they are not quite ready to buy their own home, perhaps it will help them into their first investment property, or you can keep your deposit for the time they are financially ready to commit to paying off a mortgage.Celivia
Hi Skippygirl
Yes i purchased the property 6 x 2 units on a non strata basis and inline. Then made application to strata title the property.
I certainly could if i wanted to pull out the avaialble equity in the property but have no need to do so and am happy with a small mortgage on each of them.
Each of my 3 kids has a paying in book and knows which unit is their’s. If they want to do extra jobs around the house they earn extra pocket money and can pay off their own home loan quicker.
Cheers Richard
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
This would be a lovely ‘leaving home’ gift.
says Celivia.
AHAH!ok i get it now! I know where you are all coming from! It has always concerned me that kids are often well into their thirties before they leave home. Buying them houses for their 21st mightn’t be such a bad idea after all. [biggrin] . I had previously thought of just buying them a backpack as a big hint.
milly
sorry Richard i mentioned your name in my last post but I really meant the depreciator.
Hehehehahahahehe, too funny, you got it, Milly!
When I left home at almost 20, my leaving-home gift was my mum’s faded couch, my aunt’s scratched coffee table, and a few fraying sheets and towels of my gran, but I felt like the richest woman in Babylon I tell ya![biggrin]
Mum: “I bought a new couch, dunno what to do with the old one.” *Hint, hint*
Perhaps these days the kids do not fall for cheap hints anymore, hehe.[biggrin]
They won’t take the bait until it gets bigger and better….[whistle]
Too much financial education can financially kill parents; we gotta keep them at school where, apparently, they learn nothing they can use in life! [thumbsupanim]
(I do not take credit for the advice given above-others have written fat books about the matter).
Celivia
Hiya mkofsky,
I saw the result of what you are proposing about 15 years ago before I had got into the prop. market.
My elder sister was going out with a nice young Polish boy. He was one of 4 also. His Polish parents had the same ambition as yourself and had achieved it. When the son was 21 they issued him with the title deeds of the prop, a 4×2 B/T house in Willetton (a suburb of Perth).
He immediately took the deed into the bank and mortgaged it to the hilt to purchase 3 more props. By the time he was 28 he had about 30 under his belt and never looked back. My sister eventually broke up with him mysteriously….which we all thought was a bit weird, and married someone else who was dirt poor.
One of the main reasons we found out years later was that my sister wanted to (rightly in my opinion) make her own way. Hitching up with someone who received such a massive boost from the parents and subsequently used it wisely, which magnified the boost enormously….simply drove a wedge between them. She never felt a part of the ’empire’.
Funny how good intentions, when mixed with human emotions, can sometimes turn out differently to that which you expect.
We live across the street from one of the other brothers, and he has also benefited enormously (economically) from his parents gift. There was no animosity between the siblings re: who got what and whether one was slightly better than the other.
I always thought the Scottish had the upper hand on frugality….perhaps the Polish are the dark horse.
Any chance that, with a name like ‘mkofsky’ you are Polish as well ??
I think it would be nice to buy a few blocks adjoining – then you could build a communal pool, have a cabana and outdoor kitchen for family get togethers, then everyone could go back to their own space.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
What we did for our kids was set them up with a small (about $10-20K) share portfolio while they were still at school. Benefitted very well over the years – over roughly 12 years they roughly quadrupled and the kids also learned about long term objectives as well as the nitty gritty of share investing. We put no limits on what they could use it for, just that we should be involved in their decisions until they turned 21. One spent some of it on education and holidays. The other is investigating her first IP.
Here’s my two bobs worth.
There is a saying that goes “if you give a man a fish you feed him for a day, if you teach him how to fish you feed him for a lifetime”I don’t have kids and to some extent I agree it would be nice to give them a hand up in life. However I believe you could do much better by involving them in your property investing processes, get them involved in the house hunting, finding flaws, positives with particular properties, give them tasks ( easy ones if they are young) that will provide them with the same learnings you are experiencing on this journey. Play the cashflow game with them, teach them the value of money and how to spend their money wisely. Motivate them personally and give them a good sense of their own self-worth. Encourage them to find solutions to problems and instil in them a sense of confidence that they can make the right decisions. Help them work through the difficult times when things don’t quite go as they planned. Also be prepared to learn from them if they have better ideas than you do.
I believe if you can achieve all this then they will find their own path with investing and wealth creation.
It is a fantastic journey you embark on when you have the priviledge of children in your life.MIT | Owen Real Estate
Email MeMy aim is to give my children two things:
1. the right knowledge (including setting a good example)
2. a balanced life.
with these two things they should not need a handout.
Tempting I know to plan to give them a house – and yes it probably seams hard to do – but imo giving them the other two is actually the much more difficult one and I think the one that takes more effort from the parents.
Go ahead give the property by all means, but beware the damage a gift like this can do to the person and be prepared for the risks as well as the good it can do.
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