YOUNG buyers are turning to more innovative schemes to buy property which also gives their parents a yearly return for helping them out.

He wanted to help them into the market, but worried about what would happen if things went wrong in his daughter’s lives and the investment, and the impact that would have on the family.

His product allows relatives to sponsor a co-investment in their home.

MoveUp2 is part of an unlisted residential property trust which is managed by Storehouse Group, which provides a legal structure around the process and removes parents and their children from the day to day handling of the investment.

Effectively the parents buy into a residential property investment fund with the risk spread across a number of properties not just their children’s.

Mr Delaney said it gave investors a 12 per cent return in the past 12 months.

He said money and family made poor companions and rather than lending money in an informal or unstructured way, MoveUp2 provided everyone with the framework to do it.

“Not only do you get a loved one into the housing market, you benefit financially from investing in the security of a structured, registered and audited fund,’’ he said.

Once the young owners have enough equity in the house - from growth in the home’s value and their own loan repayments – they can choose to buy out MoveUp2.

“There are no documents, if something goes wrong what are your rights?’’ he said.

“By default a lot of parents are taking on the risks on behalf of their children, we wanted to established a situation where there is some formality.

“Then parents are basically (just) making an investment decision.’’

“I did it with my parents back twenty odd years ago and it’s going to be more and more likely to happen every year because property is getting more expensive,’’ he said.

“We have clients who help with deposits and others buying for their kids even when they are five years old, they know it is a $1 million property now so when the kids are 20 it will be $2 million or $3 million.’’

Mr Gray said the majority of parents did not want to give the money away, but were happy to lend it to assist their children, so organised schemes ensured all the legal paper work was in place.

Even if not going through an organised scheme, Mr Gray advised formalising the agreement between parents and children was important.

“If you do it directly (with your parents) go through a solicitor and get some bullet points of what you agree and document all of these things in advance,’’ he said.

Mr Gray said basically it was really just a joint venture and that happened in business every day so there was no reason it couldn’t happen with property.

His tips for those going it alone with their parents are:

1. Get it done on paper.

“You have got to put the basic numbers down on paper, the rent, the mortgage. etc,’’ he said.

2. Be clear about who is contributing what.

“Everyone needs to be 100 per cent clear on who is putting what money in and how rents and profits are split.

3. Work out the worst case scenario.

Source：http://www.news.com.au/finance/real-estate/young-buyers-are-turning-to-more-innovative-schemes-to-get-into-the-property-market-is-co-ownership-the-future-of-buying/story-fncq3era-1227460128683