How my son owned his first investment property before his first birthday
There is no investment like the one done with total planning, and buying a property for a child would be a sensible step in saving for his future. Considering the fact that it is a good real estate move, there is no such thing as the right age for buying a property for your child. You can do it anytime, provided the market conditions are good. Many people buy properties in their children’s names to save for their future; sometimes they do it when the child is just a year old.
Positives of owning a investment property
There are several advantages to having an investment property. It would be of great help when the child gets to college because you can make enough money for his tuition fees, board and other expenses. Buying an investment property would be a better choice and quite different from buying a home for your child to live in. It has the capacity to enhance your returns in the long run, especially when you know how to expand your potential.
Keeping that in mind, here are certain things that you must know when you get a property for your child
Regarding the title
As a general rule, the property that you buy and rent in your child’s name would be under your control. Any benefits that come with owning the property, including the tax benefits would come in your way. However, if the property itself is in your child’s name, then you wouldn’t have any particular interest on the property other than parental control. Additionally, you will not be able to deduct the interest on the mortgage or enjoy the benefits of its depreciation. In case, you would like to hold the property jointly with your child, you would have to consult a lawyer and discuss the steps to be taken.
Have the fund to finance the deal
If you already have a property then you can invest the second property for him. You can choose for a Kiddie Condo Loan Program. Where you or a blood relative of the child can buy a property. However, to make this work, the child would probably have to live in this property as his primary residence. He can however, the rent the rooms in the house if he likes and you and the child would be treated as co-owners.
Many people prefer to buy properties for their children because they would have a good fall-back amount (in the form of a property) when the child reaches age. When the property is rented, it would pay for his fees and if his university is near the property, then he can very well stay there and save on boarding fees. He can even get his friends to stay at the house and collect rent from them. Of course, he would have to learn to do the odd jobs around the house. Through this, he would learn to do business and earn a profit from it at a very young age.
Conclusion
A person who has crossed the age of 18 can buy a property and own it. However, if the person is below that, he would have to buy with a court order. Of course, this rule varies from state to state. You would probably have to contact a lender to look at the financing options available and go on from there. Additionally, the parent-child threshold of buying a property has a limit. If the price of the property exceeds the limit then you would probably have to pay gift tax.