For investors desiring to provide financial security for their children, there is nothing better than investing in real estate with them or for them. Using race track betting terminology, investors have an opportunity to hit the trifecta. Consider the following:
- Interest rates will never be lower – parents can borrow money at an interest rate that can benefit their children for 30 years (talk about cheap money!)
- Prices will never be lower – with significant opportunity to recapture hidden equity that has resulted from an over-correction in prices.
- Residual income – positive cash flow will continue to grow every year as rental rates continue to rise.
In addition to the attractive benefits outlined above, by renting the property out parents can enjoy saving on inheritance tax. If the property is depreciated, there are also deductions that can be taken by depreciating the real estate asset.
By having an attorney place establish of trust with a family member as a beneficiary, children can enjoy the benefits of rental income and parents don’t have to worry about children risking the asset with foolish spending.
There may never be a better time for parents to secure the future financial security of their children. All successful parents should be encouraged to purchase and finance residential property while the window of opportunity is still open.