Money Moral Dilemma: Is it wrong to invest my children's savings in a property for them?

stuhse

Property is by far the best thing ive ever put my money into. Id say yes based on my experience. As others have pointed out there maybe some logistics of exactly how you do it to sort out.  

keithyno.1

You're their parent, so just do what you feel is best for them in the long term. In that respect I don't see this as a moral dilemma.

But I'd suggest taking legal and taxation advice from suitably qualified professionals i.e. solicitor, accountant and/or independent financial advisor before making a commitment, so that all avenues are covered. Rather than relying on us lot on here!

£10,000 is a lot of money to risk if it's not invested properly for them.

Ed264

Let's assume each child has £5,000. If you put that £10,000 towards the deposit for the property, then put back into their savings accounts what you have left over after the tenant pays the rent and you've paid all the outgoings related to the property, then it could make sense. It all depends on the figures. Generally, as you know, property is a good investment. The best person for sound advice here is Mr Lewis!

Bonnypitlad

Good idea, if you have found it to your advantage to have your own rental properties you should start your children off onto the property ladder. I believe there are no savings plans that are not eroded by inflation. When they are old enough you could explain the “ business “, the pro’s & con’s of being a Landlord. They may not wish to participate when old enough but as a minimum they’ll have a stake in an appreciating asset. If it works for you I can understand why you want your children to benefit 
Good Luck

sclare

So when they need the money for university or some such, how are they supposed to get to it? Especially if the property has a tenant in it who can't just be booted out

No, children's savings need to be fluid and accessible when they need it. 

That's without even getting into whether property is still a good investment

Shell1989

It's not your children's money, it's yours, and you can leave it where it is - or take it out and put it in property - whatever you feel is best.

I think accumulating property while you can is a good idea, and the money is better off in a property than in the bank, as you mention.

I don't think your children would mind you investing the money how you see fit - and they don't really need to have a say - because you're not obligated to save on their behalf. It's nice that you want to, and I am sure they will appreciate anything you choose to give them in the future.

CapeTown

The key thing is it is money YOU have saved. It is your money to do with what you want. Plus it is only 20k in total. Not a huge sum in the big scheme of things. It will not make money in the savings account as interest rates are low and inflation is high. Either property, gold or an ISA

thegrifter59

ripongrammargirl said:

Technically I would say it’s still your money and not your children’s as you are saving it, not them. You don’t say how old they are and if you are still saving etc. From my point of view it would be a great idea to invest in a property rather than cash assets which will get eaten away by inflation. It will also get them on the property ladder as they could live in it when old enough to move out (or you want them out of your house!!). Property always seems a good idea especially in this day and age of house prices. By the time they are old enough houses will be several million £ the way it is going!

Technically it isn't still the op money, it has been saved in the children's names and therefore is their money. It could lead to prosecution if she uses it. It would be helpful if we knew the children's ages.

Spendless

thegrifter59 said:

ripongrammargirl said:

Technically I would say it’s still your money and not your children’s as you are saving it, not them. You don’t say how old they are and if you are still saving etc. From my point of view it would be a great idea to invest in a property rather than cash assets which will get eaten away by inflation. It will also get them on the property ladder as they could live in it when old enough to move out (or you want them out of your house!!). Property always seems a good idea especially in this day and age of house prices. By the time they are old enough houses will be several million £ the way it is going!

Technically it isn't still the op money, it has been saved in the children's names and therefore is their money. It could lead to prosecution if she uses it. It would be helpful if we knew the children's ages.

I'm not sure this is correct. Children's bank accounts have to have a trustee on them, which is usually a parent. DH was on my sons, I was on my daughter's. Our kids weren't able to take any money out of these accounts themselves until a certain age (16/18??) though we as the trustee parents were allowed to and did on a couple of occasions to buy things as they grew up. These tended to be at times I wasn't working and our ordinary household income couldn't buy the items required at the time. Eg I remember my daughter needing a new wardrobe of clothes for starting sixth form college, I'd been out of work several months and it wasn't an expenditure I could easily manage. Though daughter was aware I'm pretty sure I could have also done it without her knowledge or agreement.

I agree knowing the kids ages would be helpful if they are 2 and 4 they're unlikely to be needing the money for something. If they're going to be school leaving age within a few years, then things to help with sixth form choices, driving lessons, University costs are all going to come into it and can the OP be able to access the money to give att hat point or will it be tied up. 

badbackandsides

Brie said:

Wouldn't it also mess up any FTB status they might have?

i think what the person is really saying is "i have 3 buy to lets, i want another one". Is it ok to use my kids money to buy one and give them back the proceeds