“We bought homes for both our kids”

In 1984, Kathy Fitzgerald Sherman and her husband, Michael, had the “dumb luck” of buying a condo for $164,000 in Mountain View, CA—Google’s future backyard. Four decades and two trade-ups later, their home is worth $2 million. The rub? By the time their kids were grown and ready to buy homes of their own, they’d been priced out of the market.

When their son, Sam, married in 2018, the computer programmer and his wife rented an 800-square-foot three-bedroom apartment…with three roommates. “It was insane,” Kathy recalls. When their daughter, Leslie, wed five years later, the couples therapist and her husband crammed into a one-bedroom apartment. Both were resigned to rent forever.

That’s when Mom and Dad decided to intervene.

They took their kids and spouses home shopping. Once each couple had found the perfect property, Kathy, a retired lawyer, hammered out a “shared equity” contract where each couple would own a portion of the property. Sam and his wife took on one-third of an $863,725 condo in Oakland; Leslie and her husband one-quarter of an $850,000 condo in San Jose. Mom and Dad paid the rest up front, in cash, leaving their kids with manageable mortgages. Leslie and her husband, for instance, borrowed $200,000 and pay $1,297 per month.

Kids who get homes handed to them often carry a whiff of entitlement. But Leslie thinks this guilt trip is outdated. “We still have this fantasy that we should all be able to buy a home on our own, but it doesn’t shake out that way in modern times,” she says. “This is just the economy.”

Why parents are pitching in on property

In today’s high-priced market, Kathy and Michael are far from the only people who’ve helped their kids buy a house. Nearly 6 in 10 parents have contributed to this purchase or plan to do so. Many view it as an advance on their kids’ inheritance when it can truly make a difference, and the numbers back this up: One study found that owning a home by age 30, rather than 40, leads to a 22.5% higher net worth by 50.

Still, mixing family with real estate can get messy. Since these homes were their investment too, Kathy and Michael didn’t give their kids carte blanche to buy any old house. They put the kibosh on a beautiful Victorian with a bad roof and nonfunctioning HVAC that Sam was eyeing. And since they’ve agreed to pitch in on renovations, they’re not against sharing their opinions on the ROI of upgrades ranging from EV chargers to bidets.

Their advice: The key to keeping the peace is a thorough joint ownership contract, available on co-buying platforms like Joynt or through a lawyer. Kathy’s contracts are 20 pages apiece, outlining every possible worst-case scenario. For instance, if they suspect their kids have dropped the ball on maintenance, they have the right to inspect the property and force repairs. So far, they haven’t had to meddle.

“We’re silent investors. We stay out of it,” Kathy says. “We’ve heard horror stories of parents who share their opinions on furniture arrangements, or have keys and enter unannounced.” Free house or no, “Their kids want out.”