Parent Offers To Lend Money To Their Kids So They Can Buy Houses But He Wants Equity In The Property

OP's daughter is mad at them because he wants to own a part of her house.

Senad

• Published in Interesting
• September 25, 2023

In the ever-challenging landscape of real estate, homebuying has become an elusive dream for many, especially for the younger generation. Skyrocketing prices and stringent mortgage requirements have made purchasing a home a Herculean task.

The story revolves around OP, who, by their admission, isn't wealthy by conventional standards but earns a substantial income, averaging over $200,000 a year. It's a comfortable income, to be sure, but not one that catapults them into the realm of the super-rich.

It's important to highlight this fact because it forms the basis of the entire story. OP, like many of us, works diligently for their earnings and enjoys spending on hobbies and interests during their leisure time, such as restoring old cars.

The crux of the narrative lies in the generational divide. OP's children, having graduated from university and entered the workforce, are now faced with the formidable challenge of purchasing their own homes.

The housing market, which in many regions has become notoriously competitive and expensive, presents a daunting hurdle for young adults.

Here's where OP's story takes an interesting turn. Their children, understandably struggling to make headway in the housing market despite government programs and incentives, turned to their parents for assistance.

What's significant is the form this assistance took. OP didn't offer a gift, nor did they provide an interest-free loan. Instead, they proposed a deal: they would lend the required money for a down payment in return for equity in the purchased property.

In essence, if the children bought a house with a $200,000 down payment from OP, the parent would own a quarter of the property. This arrangement meant that if the house was sold later for a profit, OP would receive a proportionate share of the proceeds.

It's a unique proposition that could be seen as a blend of investment and support.

What's intriguing is the response of OP's children. While one child, the son, saw this as a lifeline, his sister had a different perspective. She viewed her father's offer as taking advantage of her brother and insisted on buying a more modest condo within her means.

OP starts the story off by pointing out that they aren't rich, despite making over $200k a year

OP's kids are all out of university but just like most people, they're having issues with buying houses

OP has saved up a lot of money and they want to spend it on things they want

OP's kids asked him to help them with buying a house

OP agreed to lend them the money in return for equity

OP's daughter told them that their offer was ridiculous

OP's son on the other hand, accepted OP's offer an bought himself a home

Can't have it both ways

Not rich??

Making money off your children

At the heart of this Reddit tale is the question: is OP in the wrong? Are they truly an "AH" for proposing a financial arrangement that could help their children become homeowners?

In conclusion, OP's story isn't just about money; it's about the delicate dance between generations when it comes to financial support.

Senad