Adult Children May Be Stuck in the Nest

According to a survey published recently in the Daily Mail, one in four parents with young families expect their children to be in their 30s before they can afford to buy a home. As house prices continue to rise, one in seven parents with a child under the age of ten has started a "home fund" to help those children buy their first house when the time comes.

What does this mean to you as an investor? First, if you have or are planning to have children, you may want to begin now to put together a strategy to help get them out of your home and into their own as soon as they reach adulthood. Second, if you are working with buyers and/or sellers who may be dealing with this issue, be aware of it and help them by suggesting options.

While some parents may decide to let their children figure things out for themselves, others are looking for creative ways to help. One solution is to buy a property now, rent it so that the expenses are covered, and use the equity the property gains over the years to help when the child is ready to strike out on his own. The parents could buy in their own name or in the child's name, depending on their particular circumstances and desired result.

What's most important is that investors understand the issue, carefully consider all the possible ramifications of various strategies, then take the most appropriate action.

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