Four ways to help your children get ahead in the property market



Saving for a home deposit has never been harder – but there are several ways willing parents can help their kids crack the market.

 

With property prices continuing to rise and the high cost of renting making it virtually  impossible for many young aspiring home buyers to save, a growing number of parents are helping their children buy their first home.

Rather than leaving their hard-earned cash and assets to their children as an inheritance, many parents prefer to help them out now. But helping your children realise their dream of home ownership doesn’t have to mean forking out the cash to buy a property for them. 

  • Go guarantor
    One of the most common ways parents can help out their children is by acting as a guarantor on their mortgage. Essentially this involves offering the equity in your home as security for your child’s loan – helping them to meet lenders’ deposit requirements. This is a good way to help without actually having to stump up any cash or hold any stake in the property yourself. Of course, in the event that your child has trouble meeting their loan obligations, you will be held accountable – so it’s important to be confident that your child will be able to manage their loan commitments.

  • Join forces
    Another way parents can help their children is by joining forces and co-purchasing with them. This not only reduces the initial sum your child will need to save to enter the market, it will make their repayments just that bit easier to manage. At the same time, you’ll be building your own property portfolio. Just be sure to enter any co-purchase arrangement with care, and have a legally binding agreement that sets out all parties’ commitments and entitlements to avoid any potential disputes.
  • Deposit help
    A gift in the form of a deposit, or part of one, is another way to give your children a helping hand into the market. Equally, just offering your children an interest free loan for their deposit could save them thousands of dollars.

  • Rent assistance
    With rental costs one of the biggest barriers to saving a deposit, helping your children to reduce their rent obligations can be an enormous help. Whether it’s offering them lower board, rent free accommodation or below-market rates in one of your investment properties, this can help your children save a deposit.

 

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