Buying With Help From The Rental Units
The Times dishes on the New York City real estate market’s dirty little secret — that it’s being fueled in great part by the retirement-age parents of twenty- and thrity-somethings who wouldn’t otherwise have a shot in hell of owning even a studio apartment. When we bought our first apartment — a 950-square-foot prewar one-bedroom…
The Times dishes on the New York City real estate market’s dirty little secret — that it’s being fueled in great part by the retirement-age parents of twenty- and thrity-somethings who wouldn’t otherwise have a shot in hell of owning even a studio apartment. When we bought our first apartment — a 950-square-foot prewar one-bedroom in Manhattan — for $160,000 in 1996, it was still possible for a 27-year-old and his fiancee to buy something on their own. Now, though, the idea of having socked away a downpayment of $150,000 or $200,000 (instead of $30,000 or $40,000) by the age of 30 is realistic only for those in a small handful of professions. Enter Mom and Dad. In Williamsburg (where Natasha Agrawal, bottom right, got hooked up with a $900,000 penthouse by her parents), one Douglas Elliman broker estimates that one quarter of the condos are being bought by parents or the trust funds they have set up. The twist, The Times notes, is that these hand-outs often come with some (creepy) strings attached, such as extorted promises not to let a boyfriend or girlfriend move in.
Buying With Help From Mom and Dad [NY Times]
I’m investing my kid’s education so that he’ll be able to pay my mortgage in future.
Since the beginning of time, parents who have the money to do so have helped their children financially. Has nobody heard of trust funds? They’re hardly rare, in families of certain income levels. None of this is anything new. And a “handout” does not automatically mean a kid will turn out lazy. Just like it doesn’t mean no financial help at all will automatically mean a kid turns out to be a “go getter”. Those traits are determined by the attitudes and outlook a child is raised with, not how much money is given or not given to them.
I bought in the mid-’90s, so it’s probably too easy for me to say, “Man up” today. But that was exactly the same thing I thought way back then, of neighbors who even then were getting downpayments from their parents. Maybe there’s some point at which life becomes too hard and the stigma of getting the handout goes away, but I don’t know what that point is.
Kind of sad. Its supposed to be a city of go getters and entrepeneurs. I managed to come up with my own down payment. I suspect more young people could if they didn’t need to start with a 900k loft of their own brownstone.
duh. everyone i know, including myself has had help from parents for downpayments. some were loans, and some were gifts. ours was a loan-couldn’t have bought that brownstone without it!
I didn’t get a handout, and I certaintly will not be giving my kids one. I have been working since before the legal age, and my kids will get the same treatment.
Anyone over 18 years old doesn’t need handholding, in the form of money or not, from their parents.
Parents help to pay for college and sometimes foot the bill for enormous, over the top weddings, why not help a little with a down payment? The price point in Brooklyn for a decent apartment is pure insanity and I don’t have the strength to discuss the cost of a house right now. Mommy is a secretary and Daddy is a court officer leaving me far from being a “trust fund kid” and they helped with the DP. Not on a 900K penthouse apt., but that’s just logistics, right? I’ll certainly do the same for my daughter when the time comes.
Kensingtonbrooklyn:
Don’t worry in the future, teachers, artists, community activists can apply for a credit card from the NYC gov (even if you have bad credit or no credit!)–as police recruits are currently receiving 😉
In reality, it would make sense that a co-op or condo board would be very wary of a trust fund type all-cash or “non-mortgaged” transaction coming from their new apartment owner. Just because they are paying cash now in full doesn’t mean that the “strings” between kids and parents couldn’t get negatively tweaked in the future, with owners even ceasing maintenance or other common charges. what if the kids get their funding cut off and/or are too immature to sell or even can’t sell because their parents refuse to do so (if they hold joint title) or the market has dipped too much? It’s kind of like creating a dorm-room atmosphere in your building by letting these types of buyers in. I would screen very hard and very diligently if i were a coop. condos can’t do much, i suppose.
So, let’s say “trust fund kid owner” stops making maintenance payments on a condo (a coop could probably pull the shares and force a sale, no?) How do you get the person to pay? You have much less leverage to make someone pay up if there is no mortgage, which another poster alluded to as well.