How can my 13 yr buy a house

mrginge

ladydukes wrote: »

Pixie5740
the 10% return is on a flat for £33,000, that currently have a tenant on a long term contract with a yearly rent of £3800. so by the time we pay boiler insurance etc its more than 10%.
we live in south wales.....properties are VERY cheap here...lol

PS. I have spoken to a family friend who is a FA and he suggested it would us the best return as investment in stocks etc wouldnt give us the same return.

Stocks and shares don't generally require you to have to manage or repair them.
IMO an FA suggesting that a 13yo invest directly into property management is bordering on professional negligence.

Did your family friend explain the ongoing cost implication, the time involved and the risks associated with becoming a landlord?
Or did he just say 'stock market 5%, becoming a landlord 10%'?

SuzieSue

ladydukes wrote: »

No not really. she has aunts on her father side but we haven't seen them for years and beside they absolutely hate me, so I wouldn't get involved with them
I have a foster sister and foster mother, as they are not blood related to her would they do?

You would need to check but I can not see why not. I know that if grandparents give children money, any income from that money is not assessed on the parents of the child, so I can't see why having your foster month as trustee would be any different. The only problem I can think of is that the money originally came from her father, so I don't know if that makes a difference. You would need to check with HMRC.

ladydukes

antrobus wrote: »

The money inherited by your daughter from her deceased father's estate already constitutes a trust.

See http://www.hmrc.gov.uk/trusts/types/vulnerable.htm

Hello its not estate it was a payout from a pension, it states in the letter off The Pru that it didnt form part of his estate. he didnt have an estate he died in poverty.
Its all very confusing!

ladydukes

mrginge wrote: »

Stocks and shares don't generally require you to have to manage or repair them.
IMO an FA suggesting that a 13yo invest directly into property management is bordering on professional negligence.

Did your family friend explain the ongoing cost implication, the time involved and the risks associated with becoming a landlord?
Or did he just say 'stock market 5%, becoming a landlord 10%'?

GOD theres always one!

ladydukes

thanks guys
I know now theres no simple answer........think I'll ring the HMRC and she what they suggest

Pixie5740

ladydukes wrote: »

its a the first one. but Ive spoken to many agents in the area and there is a high demand for 1 beds, as most of the property is 3 bed terraced houses, and since the bedroom tax thing there are waiting lists. The owner is selling because he has numerous properties and is nearing retirement he wants to down size his portfolio. this is not the only property in the area he has for sale.
The tent has been in the flat for 5 years and has asked that he stay on. probably for the above reason.

Like I said we done our research.......besides we could cjoose from about 500 other properties in our price range giving the same yeld.

I believe you've done some research on this. The properties with higher rental yields also tend to be the higher risk rental properties i.e. more rent arrears, more damage to properties, etc. I think one forum user has had whole central heating systems stolen before. :eek:

princeofpounds

I wouldn't say that investing in property is wrong for minors. Given the long-term time horizon, they do need to be in real assets generally-speaking. I would say that all cash was a pretty delinquent decision.

Unfortunately due to the low interest rates, pretty much any asset is depressingly overvalued. That's the nature of financial repression for you (google the term if you like)

Cornucopia

I think you would need to consult with various professionals to be sure of your/your daughter's positions.

The idea of owning property is a reasonable one (I don't accept the nay-sayer's view above, I live off my rental income). However the practical implications are considerable - for example, I don't see how a minor could be someone's Landlady.

I would have thought that some sort of trust fund, designed specifically for minors would be more straightforward, if less fun. It would also probably come with a complete set of guidance on parental tax/benefits position, and possibly be designed with avoidance in mind.

BigAunty

Also, you need to factor in Capital Gains tax when your daughter sells it in the future. To understand how this works and to model some scenarios for its future expense, see the HMRC website.

Cornucopia

The CGT liability is for the future, and depends solely on the profit made (if any) at the point of sale.