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What if we want to purchase a home for our kids? Why would that be considered investment property?

  • July 24 2012 - US
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Answers (6)

A Homestead is your primary residence not where your children live and you pay the payment.  I come across this all the time.  A parent calls wants to buy their college age daughter or son a place to live while in college until they hear they have to pay over 20% down and pay double property tax.  The Real Estate recession would of been over if the powers that be didn't punish the investors, second home owners etc. 

It is different if you buy for your children in their name and its their primary residence. 
  • July 26 2012
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It would only be considered an investment if you are buying it under your name and your kids are living there.  This would be a investment property because it is considered "non-owner occupied". 

If you financially enable your kids to purchase the house under their names, then you wouldn't have this issue.

Good Luck.
  • July 26 2012
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Profile picture for Ofe Polack
It all depends how you go about making the purchase. Are you given your children the money to purchase the property? Or are you purchasing the home directly but under their names? Who will pay the taxes? I suggest that you have a word with two professionals, a real estate attorney and your accountant, between the two of them they will be able to guide as to how to proceed to make the most out of your generous gift. God bless you!
  • July 25 2012
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Are you putting the house in their names?

If so, it's not an investment property.

If a home is  in your name, then it is ether a primary residence, an investment property or a second/vacation home.
  • July 24 2012
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Profile picture for Cindy Quinton
Since this is under "buying a foreclosure" I'm wondering if you running up against the owner occupant buying period issue?
  • July 24 2012
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Profile picture for wetdawgs
You may have encountered the definitions of "primary residence" (where you live) vs "investment property".   Assuming you don't plan to live there, it isn't considered your primary residence, hence it falls into the other category.    

  • July 24 2012
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