As young couples move back home, what are the potential pitfalls?
Updated: Oct 9
Original article by:
Anna Sharratt
THE GLOBE AND MAIL
September 1, 2019
📰 Read the FULL ARTICLE here.
I spoke with The Globe and Mail about the growing number of young couples moving in with their parents to save for a home, and how families can make it work. Here are the highlights and my contributions.
Key Takeaways
A growing share of young Canadian adults, including couples, are living with their parents, most often to save money for a home.
In expensive cities like Toronto and Vancouver, living rent-free can help couples pay down debt and build a down payment faster.
Parents often give up potential rental income to make room for their adult children.
Informal arrangements can create legal risk if a couple separates, especially if they've paid toward the mortgage or renovations on the parents' home.
A clear conversation up front, a written rental or cohabitation agreement, and careful records of who contributes what can prevent costly disputes.
My Perspective
Many of my clients are struggling to save for a home of their own. Between rent and debt payments, there's often very little left over for savings.
"They're not able to save up while paying rent."
Parents make sacrifices too, since that space could otherwise bring in rental income. But many recognize how much the housing market has changed and want to help, and in some cultures, intergenerational living is already the norm. Beyond helping young couples save, it can also keep them from taking on more debt. To keep everyone on track, I suggest parents charge a modest rent.
"Parents should levy a small rental fee because it keeps them accountable."
Parents who want to go a step further can invest those monthly rent payments on their children's behalf, then hand them back as a head start on a down payment when the couple is ready to buy.
Originally published in The Globe and Mail by Anna Sharratt on September 1, 2019. Use the link at the top of this post to read the full article.
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