As more parents help their offsprings get on the property ladder, we ask the experts if a helping hand is ever a good idea and how both parties can protect themselves against any future obstacles.
Video transcript below:
Reporter: More parents are digging deep to help their offspring get into real estate, it’s a noble thing to do and an expensive one. But does a helping hand make happy families?
More parents are helping their children get a foot on the property ladder. Giving money away is a risky business even in families. Should parents give the child a break or should they enforce some investing rules?
Justin Kua, Platinum Estates Team, Re/Max Realtron
Justin Kua: In my experience with my clients, it has always been a great situation for both parents and children and in two scenarios. Number one if they are going to help their child with a down payment, it definitely puts a little bit of ease and gets their children into the game of real estate a lot sooner and there is always advantages historically proven that the earlier you get into real estate, the younger you purchase the better it will pan out for you in the future. As well too when you are going into a financial arrangements, you are talking about terms of investments, I believe that without question if you are going to be taking that sometimes to a business stratagem together, it is very important to have everything written down in contract and especially having a negative strategy that both parties are agreeable, both parties are agreeable with.
Reporter: Parents the day of being your child’s personal bank account needs to stop or so the experts say.
Shawn Maher, G.S. Maher Solutions Inc.
Shawn Maher: You know there is always a danger when you give money away, but I really believe helping your children is definitely a good thing where the market is right now. It’s very hard for children to get into the market. So I think you know it’s a great thing for parents to do, but you have to be very cautious. I would set up a loan. I think loan, that means the children have to pay it back, you know whatever you decide to do based on the terms to help them out, but it’s going to give them some responsibility, maybe even set that loan aside for later, for something that an emergency happens and they don’t even realise it’s there, but it does teach them some responsibility.