Did You Know That Parents Can Profit From Equity-Sharing and Help Their Kids?

Equity-sharing is a two-way street that lets everyone in the family reach their real estate goals:
• With parents’ cash help, a young married couple, for instance, can buy a home they couldn’t otherwise afford.
• With children sharing costs, parents enjoy both tax benefits and investment profits.
Example: In return for a 50% (figure varies) ownership interest, parents make $20,000 down payment on a $100,000 home.

The young folks live in the house and pay:
• Half the mortgage payments.
• Half the property taxes.
• All the maintenance costs.
The children can claim tax deductions for:
• Their half of the mortgage interest.
• Their half of the property taxes.
The parents do not live in the house. As investors, they can depreciate their half of the house (not counting the value of the land).

When the home is sold, the equity-sharers divide profits 50/50. Out of their share, the young folks repay the parents the $20,000 original down payment.

Such a system will work on any ownership percentage the co-owners agree on (a 25/75 split, etc.) It also is applicable in cases where co-owners are not related.

For more details on an equity-sharing purchase, your call or e-mail is welcome, We’ll be glad to share our knowledge.