Well, my kids have been out for many years, my daughter, Kim with two kids (No. 1 salesperson at LinkedIn) and my son, Matt a Leadership in Environmental Engineering & Design)-certified project manager with GreyStone Construction International in New York City, finally getting married on June 3!
Luckily one already has a home and my son, had already accumulated one cond-op (hybrid condo & co-op, very rare!) in the lower East Side and another condo in Brooklyn that he purchased in September 2016, where he currently resides.
I happen to be a fortunate parent that I have extremely successful kids that were able to purchase their own homes with their own earnings (with absolutely no assistance from dad).
They worked smart, diligently and hard over the years, to save that most crucial and critical down payment.
My daughter, while single, never rented, but went right into the purchase mode when she was 28.
My son and his BFF, frat brother from the University of Maryland, lived the lives of Riley; bachelors for several years in several five-six story walk-up flats and the final penthouse pad with doorman and all the amenities that two single guys could ever want!
Fast forward, his frat bro, got engaged and married and moved out.
Realizing that rent was a dead-end street, he finally realized and listened to his dad and became his own landlord and purchased his first apt, a cond-op in the Lower Eastside and (gaining the tax benefits, price appreciation, increasing his wealth, when renting was decreasing his future wealth and finally, gaining the security of not having to worry that the landlord wouldn’t renew his lease).
Then again, like his sister, he scrimped and saved to come up with that ever important down payment; but only 10 percent as opposed to the normal 20 percent out of pocket; due to the fact that the apartment was a cond-op and their offering plan and amendments allowed a flexible 90 percent financing.
However, it was still all about strict and dedicated squirreling away of a sufficient portion of his salary.
Sacrificing whatever was necessary and not wasting money on nonsense, immediate gratifications and “temporary satisfaction for the moments.”
Even my son drove an 11-year old hand me down 1968 Oldsmobile Cutlass with over 150,000 miles.
Some of his friends, I am sure snickered at him, wondering, how come your dad doesn’t buy you a car, can’t afford it?
Well, when he graduated college, a few years down the line, he bought himself a used BMW, so at that point, they all stopped laughing; I guess they got it and there was a lesson learned.
My dad didn’t give me a graduation present either, so back in 1973, I ordered a brand new 1973 SD455 Trans Am, only $4,700 at that time; flying to Detroit, to Jim Causley Pontiac on Mack Avenue, picked it up and drove it all the way home through Canada; one of my top 10 moments of sheer fun and enjoyment.
So, I thought it would be an excellent learning experience for him to do the same, although in today’s dollars, he spent much more than I did; but did it with his own money!
So now you are saying, I want to help my kids or maybe do it the way I did it?
It’s your choice; however, prices have escalated quite a bit from when my children initially bought and they also weren’t burdened with all their student loans, since we split them 50/50, again, to learn the responsibility of paying.
However, my daughter’s loans from Emory University, were quite a bit more than my son’s at the University of Maryland, so I chipped in a bit more.
Unfortunately, the burden of today’s student loans and their financial responsibility to repay, are one of the main debilitating factors that are keeping many, many millennials and other graduates, from purchasing, especially, if they went to an Ivy League or high cost college or university.
This is a difficult situation and a major burden experienced by so many graduates, that should be addressed by our politicians, to help minimize and possibly alleviate their financial burden.
Some way a solution should be created, maybe based on reasonable repayment schedules with lower interest rates, based on a formula based on a percentage of their salaries and wages.
Stay tuned and come back to my column for Part 2.
Phil Racies is the owner of Turn Key Real Estate at 7 Bond St. in Great Neck. He can be reached by email: Phil@TurnkeyRealEstate.Com or by cell (516) 647-4289 to answer any of your questions. To search for any type of properties or to see what your home is worth or homes that have sold in your area, go to WWW.Li-RealEstate.Com.