How to help your kids get into their first investment home

With recent figures suggesting Perth housing prices may continue to fall in the foreseeable future, now’s the ideal time for your children to make their move by purchasing their first investment property. Yet despite the enhanced affordability for first home buyers, this is still a big commitment that shouldn’t be taken lightly.

It should come as no surprise that Perth is seeing more and more parents (and even grandparents) stepping in to lend a hand in their home buying journey. In fact, helping them climb the property ladder is now considered a more favoured alternative to leaving a will.

Here are our top 5 tips for helping your kids get into property development (Perth).

Gifting a deposit
If you can afford it, giving your child a decent deposit will slash the amount they need to borrow, meaning they can enter the market sooner than anticipated and strike while the iron’s hot. It will also reduce their interest repayments, meaning they save long term.

Family guarantee
Don’t have a safe stuffed with cash to donate a deposit (or would rather spend it on that trip to the Maldives)? You can still help out via a family guarantee, which basically leverages a portion of your property’s equity as extra security for the banks. The amount varies, but it’s usually a percentage of the value of the property being purchased (e.g. 25%). By acting as a family guarantor, you’ll increase the chances of your child’s loan being approved faster. It also means they won’t have to pay mortgage insurance – and the loan remains in their name. 

Joint borrower
This commitment carries more risk than a family guarantee – you sign to own just half of the property, but would take full financial responsibility if your child failed to contribute their repayments. They’ll love you for it, but you’ll want to make sure you’re in a stable position to see this through, should the worst case scenario play out.

Teach them to save
Many young adults have a ‘here and now’ mindset, making saving for a deposit something that doesn't come naturally (be honest, we’ve all been there). Sometimes the best help you can offer is your experience and advice. Sit down with your child and show them how to routinely put money into a high savings account, develop a money management system, and reach their week to week goals. By leading them to water, you’re helping foster positive saving habits that will help them reach their goals. 

Explain tax benefits they may be eligible for
The government has introduced a series of tax benefits and incentives to make it easier for Australians to enter the new home market. Do your research to help your child find out what they are entitled to. For instance, they may be eligible for the $10,000 First Home Owner Grant (FHOG) - a one-off payment for first home owners to encourage construction of new homes.

Subdivide your block
Got a large backyard? If your property meets the right requirements (and neither of you mind living in close quarters), why not consider subdividing your property? A strata development (Perth), could allow you to split your property into separate titles so your child can build out the front or back of your home. Alternatively, a grouped housing site development will allow you to invest in both your child’s and your future by meeting Perth’s demand for higher density living.

Summit Projects – expert land developers (Perth)

Want to help your child make their entry into Perth development a smooth one? Talk to Summit Projects. As the multi unit property developer Perth trusts, you can count on their expertise to make the most of your child’s investment. And as narrow block developers (Perth), they can build a perfectly matched new home that optimises the space available.

Use the property development calculator to find out how a Summit development can help your child make a sound investment in their future.


Disclaimer: The information within this article is general information only and it does not constitute advice or recommendation. It does not take into account your financial situation, investment objectives or personal circumstances. Before making a decision about developing your property, you should seek independent financial, legal and taxation advice.

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