It’s tough for a child just starting out to buy a home in today’s pricey real estate market. You’d like to help out, but you’re somewhat limited in what you can do.
Strategy: Consider an “equity sharing” arrangement. With this technique, you share in ownership costs—usually, right down the middle—as well as the resulting tax benefits.
At some point, you can sell your interest in the home to your child. This often occurs when the child is further along in a career.
Example: Your newly married daughter has found her dream house but can’t swing the payments. You step in and agree to pay for 50% of the down payment while the newlyweds pick up the other 50%. Legal ownership of the home is split 50-50 under the arrangement. Then the couple moves into the house and pays you a fair rental for your share of the property.
You can use the rent money to pay for your share of the expenses such as insurance, repairs, property taxes and mo...(register to read more)