Parental purchase

What is a Parental Purchase?

A ‘parental purchase’ is a term used when parents buy a property, usually a condominium or a house, in a homeowners association (HOA) for their offspring. The purpose of this purchase is generally to provide stable housing for the child during their college years or as they embark on their initial career journey. This type of purchase often proves beneficial for the parents as it can be considered a sound investment, with potential for property value appreciation and rental income if the child moves out.

HOA Involvement in Parental Purchases

When a parental purchase is made within an HOA, the parents become members of the association and are subject to its governing documents, including bylaws, rules, and regulations. They are responsible for ensuring that the property and its occupants comply with these rules. As homeowners, they are also obligated to pay HOA dues and assessments, which contribute to the upkeep of common areas and provision of community services.

Benefits and Drawbacks of Parental Purchases

Parental purchases can offer several benefits. They can provide a reliable housing option for students or young adults, potentially reducing the cost and uncertainty of renting. They can also serve as an investment opportunity for parents, who may be able to sell the property at a profit or earn rental income in the future.

However, there are also potential drawbacks to consider. Owning property in an HOA involves responsibilities and costs that can be significant. Furthermore, if the property’s value declines, the parents may not recoup their investment when they sell.