4 Reasons Why Baby Boomers Should Consider Helping Their Millennial Children Buy A Home


I’m not a Millennial myself. I’m referred to as Generation X. I’ve been blessed to have great parents who love me, have supported me in everything I have done, and have encouraged me. And because of that I have been very successful in my life. Now I know I’m not alone when it comes to having awesome parents. However, I sometimes think I was lucky to be born just a bit earlier than those who are classified as Millennials. When I was in college, tuition was high but not like it is today. I’m constantly confused by how young adults manage to pay for college. It seems like the price of everything, including rent, is going through the roof! I’m so glad I’m done with college and not having to figure out how to manage all the debt just so I can afford a college education.

I understand that this article may not fit all parents, but I’m writing this to speak to those parents who do have the means to help their children, even if it’s just to help them qualify for a loan to purchase a house.

Your children are paying very high rent while attending school in San Diego. They could be paying a similar amount to own a property instead.

The reality is that your children are paying very high rent while attending school in San Diego. They could be paying a similar amount to own a property instead. By the time your child graduates from college they will likely be $30,000 or more in debt. Imagine this instead: your child is graduating from college after making payments on a property (instead of paying for rent). During the 4-5 years they spent in school their home has appreciated $100,000 or more (this is in line with appreciation rates in San Diego)! Now they can sell the house and use the money to pay you back the down payment AND their school debt. Alternatively, they could hold on to the house and either continue living in it or rent it out to others. Either way, they’d be graduating college with a huge headstart in life.

Here are 4 simple reasons why this is a great idea:

  1.     If you are able to help your millennial child purchase a property, they will start to build a good credit history and after they graduate from school they will have an easier time getting a loan if they need one.
  2.     Homes in San Diego appreciate rapidly. If you helped your child buy a property for $400,000, that same property could be worth $500,000 or more after 4-5 years. In an up market, the property could appreciate 8% per year. Assuming that’s the case, a property you paid $400,000 for could be worth about $587,000 in 5 years time!
  3.     Other students at your child’s college will need a place to live, including their friends.  A 3 bedroom home/condo could have anywhere from 3 to 8 tenants bringing in $2,400 – $3,200 each month in rental income. That’s your child’s mortgage payment covered!
  4.     After they graduate, they could decide to sell the property at $587,000. After selling costs, paying off the loan, and returning your down payment, your child could net close to $140,000! This money could be used to pay off their student loans and give them a massive headstart in their adult life.

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Scott Cheng - Real Estate Broker




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