Bingo. People love to go into some deep analysis of housing and "agh it's a really hard problem", but it's simple at the end of the day: we have constructed, and continue to construct, a society where housing is not considering a right, but instead a way to inflate your bank account. It smells like this from the prospective house buyer at the bottom all the way to the government propping up the system at the top. Time to change the system. I refuse to believe that out of all the great things humanity has achieved, effective housing (shelter, of all things!!) is unsolveable.
The system will not change because the folks in charge profit and maintain power from a system of accelerated financialization. They then wring their hands and clutch their pearls as young people take rational actions by not having children (rapid fertility rate decline), worried what happens to the pyramid scheme as it runs out of steam. Their crisis is the young cohort's survival mechanism.
Young people have to do their best to survive in an unfavorable macro for the life they have left, and old folks age out eventually (which is the only way they give up power, the power which is needed to make change to improve the macro).
I think there may be something in this point. Lots of generational wealth in my area. Property investment is nearly a sport. The entry bar for which is lower if you already have wealthy parents providing you property (or equivalent buying power) for yourself, so the eye turns to property for investment. I know people in their early 20s, decently well off, already thinking property investment is the correct option for them. The rich get richer and the poor get poorer.
And a lot of folks don't have parents leaving them a portfolio or a high value asset they can live in. A material amount of people 55+ have no retirement savings, have material amounts of debt, or are in similar situations where the house might have to be sold versus be conveyed to children at death to break even (healthcare, senior|nursing home, memory care facility costs until death).
If you are lucky enough to inherit an unencumbered (or one with a mortgage you can at least afford) residential property you can live in as a young person when your parent(s) pass, that is fantastic luck. Take the win if you can get it. That is not the mean experience, based on the data.
This was the case with my dad and he isn't even 55. His house wasn't even worth all that much relatively speaking, but he had too much debt, not enough income, and too many expenses (more kids).
It's fairly likely we won't see any inheritance from him. The 2 of us who can realistically work for a living might make more, but it's not looking likely either of us will ever be able to retire. On the other hand, if I chose the same life, it's plausible I could buy a house eventually, but buying a house in my home town isn't worth the trade of living in my home town.
Not advice, educational purposes only. Speak to an estate planning attorney. Depending on resources and objectives, a property can be transferred into a corporate or trust entity. Parent rents from the entity, this covers the mortgage payment. Upon parent's death, property basis is stepped up (no capital gains), beneficiaries retain control of the asset. If children wanted to rent it out to cover the mortgage, they can. Federal statute prohibits a lender from accelerating the note when a property is transferred from parent to child(ren) (Garn-St. Germaine Act). This preserves the equity in the asset while shielding it from creditors (potentially, strongly contingent on state creditor law). Speak to an estate planning attorney.
Primary residence equity is the largest component of wealth in most family estates, ergo maximize efforts and opportunity to protect that wealth. When it’s gone, it’s gone. Good luck.
Thanks for the detailed suggestion, I do appreciate it, but it's gone. I just hope he's able to relieve himself of a few burdens and find a way to earn a better income for the rest of his life, although it's a pretty bad time to hope for that.
in my experience its normal that old folks have lots of children and inheritance works out that the house is sold and revenue shared among children instead of one of the children moving in
