It's a big decision for both of you

Helping Your Adult Children With Housing

by Debra Karplus


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Your son or daughter is heading off to college where the cost of student housing is ridiculously high either in-state or possibly out-of-state. Or perhaps your older adult child wants to own a home either alone or with a spouse or possibly children. You have the financial means to jump in and help, and feel that owning some real estate in addition to the house where you live might be a good investment. But should you?

A September 2014 report from USNews.com stated that college housing costs about $8400 to approximately $9000, per year, depending on the school and how close to campus the housing is located. Multiply that for the four years that you hope each of your children will spend in college, approximately $36,000. College housing is clearly no bargain. The report in USNews suggests that if you plan to buy a house for your college students to live in, a house costing less than $200,000 makes the most sense. So what are some of the advantages and disadvantages of owning property for your children to live in?

Related: On-Campus vs. Off-Campus Living - Which Is Cheaper?

Expect your house purchase for your college student to be a short-term investment.

Experts, such as MoneyNing.com, state that for a house to pay for itself, you must own it at least five years. If you have only one child heading to that specific college town, they will only be there approximately four years. So you could own the house only for the years they are in college and possibly take a loss, depending on the housing market at the time you plan to sell.

If you establish a financial and legal landlord and tenant relationship with your college student child, you may be able to take advantage of tax benefits in terms of expenses, such as real estate taxes, homeowners insurance, utilities, garbage hauling, home improvements and repairs, and other money spent for the property like lawn mowing and snow removal. You also need to be cognizant of the municipal codes for landlords.

But what if your college student changes their plans? They might opt to transfer to a different college or maybe attend no college at all. Or maybe they want to move in with some new friends. And if your college students are "problem tenants" and do not take proper care of the house, then you have a different sort of problem.

You basically have two options. You can sell the property as soon as possible, so it does not sit empty and invite trouble. Or you can become an out-of-town landlord to people who are not your college students but are other people's college students or simply people in the community who want to rent your property. Being an out-of-town landlord is an adventure you don't want unless you visit frequently, or you can opt to hire a very capable and trustworthy property manager.

Talk with an attorney, an accountant, and other people who have chosen to buy a house in the college town where their children will live while in college. Your college student might actually get in-state rather than out-of-state status on their tuition, saving huge amounts of money.

Owning a house for or with your adult children can be a great idea, or not!

Your adult child just landed a first job and would like to buy a house, but lacks capital to make the down payment. In a July 2014 report on SFGate.com, some of the details of helping your child buy their first home are detailed. Again, a lawyer can help you figure out what option works best for your family, specifically about who actually owns the property, who is responsible for mortgage payments, and the upkeep of the property.

There are numerous ways that the ownership can be established. Your "tenants" can lease with option to buy, or you can simply help with the down payment with the expectation that they make the monthly payments.

Will you leave
thousands of dollars on the table
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Helping your children helps you, especially in financial matters. But you do not want to jeopardize your own finances in the process. Have a serious talk with your college student or adult child and family and get some legal guidance to determine if owning a home for or with your child is right for your family.


Debra is an occupational therapist, accountant, teacher and freelance writer. She is a writer for Advance for Occupational Therapy Practitioners. She also writes for Grand Magazine, has some items (fiction and non fiction) selling on Amazon.com (kindle), has written several travel articles for the Champaign-Urbana News-Gazette and several articles for freelancewriting.com and volunteers as a money mentor for the University of Illinois Cooperative Extension money mentoring program. Learn more about her at DebraKarplus.blogspot.com.

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