AIBU to charge my DD rent to live in a flat I have bought?

[Canadianskates]

I am in the (fortunate / unfortunate?) position to have inherited some money after both of my parents died a few years ago. I am using it to purchase a small flat so my DD can live there when she is at university and since the cost of halls / private student lets is shocking. She would have a flatmate who would pay the market rate for rent but I’m struggling to think of if / what to charge DD.

She got a student loan in her first year and pays her halls from this. She also received some of the inheritance which will help with daily living costs across her whole degree so she won’t need a student loan each year.

Part of me wants to help her re hugely reduced or no rent but I also don’t think she should just have a lovely flat for totally nothing either. I don’t want her thinking she doesn’t need to work to get things or that money / flats just fall into her lap. It wouldn’t feel right to charge her the market rate either though.

I’m struggling what to do. AIBU to charge her rent & bills? She is 19 and plans to get a part time
student job too.

I pay for my child’s uni accommodation. I couldn’t charge her if I owned a flat and she was a student.

Well she should definitely pay for bills.

But letting her live there rent-free sounds fine imo.

I certainly wouldn’t charge her any rent while she’s a student.

Charge her a slightly cheaper rent and put the money aside (Don't tell her). She can use it to offset her student loan when when she finishes Uni, start a pension fund, savings etc

I’d consider a reduced rent vs market and saving it for her house deposit/car/whatever she needs later. If you can afford this.

Does she get a full student loan? If not, just don't give her the money you would otherwise use as the parental contribution in lieu of rent?

I wouldn't. If I had the money to buy a flat for my dc to live in whilst at uni, I'd be doing it purely to save them/ us money on accommodation costs. So they'd live there rent free.

OP, decide what would be a reasonable rent, reduce it a bit and charge her that - then put it away for her towards a deposit for a house. That way, she will be in the same financial boat as her fellow students, but will have something saved up for later. You are in a very fortunate position to be able to consider letting her live rent-free, but university is as much learning how to budget and manage money as the academic stuff.

£200 a month maybe ?

Put it asides she has money for a future deposit.

What will you do with flat after DD has left uni?

Why on Earth would you charge your own daughter rent to live in a flat that you own outright? Yes, she should cover the bills, that's fair and sensible. But pay rent? Why do you want to make money off your own child while they're a student?

If she needs to take out a loan for living expenses, then don't charge her rent
If you are financially assessed as able to financially support her living expenses then there's no point charging her rent as she'll pay it out of the money you give to her.
She may struggle to find a part time job, so while it should be encouraged it cant be depended upon, and may be term time only anyway.

Regarding the option a pp poster said to charge her rent, save the money and pay a chunk off the loan when she's graduated, that's a really bad idea because:

1. She is charged interest on the loan from day one so she will have to repay a lot more than she borrows. 2)The loan repayment rate is 9% of income above the income threshold no matter the value of the loan. So even if you paid £10k off a £30k loan she continues to pay 9%
2. the majority of graduates will never repay the full loan in their 40 years of working. Therefore if you pay £10k off a bigger loan, the amount she pays over lifetime won't be affected in the slightest.

So there is a huge benefit to her not having a loan at all, or to having such a small loan that she will be able to pay it off in a few years. But the difference between a £30k and £50k loan is irrelevant, due to points 2 and 3 above.

So let her live rent free for 3 years and save her £30k in loans!

Rent free if she get minimum loan and works so she stand a good chance of quickly clearing her debt when she starts working

Who pays the bills ? Council tax? House and contents Insurance? Etc. Ask her to pay a nominal amount cover these?

We asked our stepson to set up a savings account and put a reduced rent in that and send us regular screenshots to prove he was saving.

If she pays you rent then you will have to pay tax on it.

While my child is in full time education, I cover her living expenses, including her rent.

When she leaves education, she has to become self supporting, even if she needs to live at home where the rental rates will be sliding scale with income.

i would charge her something, even a nominal amount. If she wasn't in the extremely lucky position of having a flat to live in her mum had paid for, she'd have to be paying rent to someone else.

I wouldn’t charge my kids rent unless the money was really essential to me. Not a student, definitely not. She will need to borrow money to pay you. It seems a bit mad and a poor use of family money.

Your dd should pay so she learns to budget. You can always save the money for her. Will she be paying the bills?

And I assume the flat mate will be paying you, not dd?

Of course you should let her stay there rent free if you can afford to,
We paid for both our children’s accommodation and living expenses. I appreciate that some parents can’t afford to do this but I think you can.

Nothing, you charge her nothing. You are supporting her through her education. That’s what we do as parents.

she is 19 and at uni and you inherited the money! What’s the point of charging her rent. Quite mean actually! If she was working or not doing anything, I would say something different. Do you really need the money?

funny how you said “flats don’t fall in your lap” when you inherited the money for this one!! 🤣

This. It seems totally over the top to buy a flat for two years at uni. I’m sure the taxes and Solicitors’s fees far exceed the cost of university accommodation.

I wouldn’t charge her rent if that meant she took out less loan. But if she is insisting on taking out a full loan then charge her a rent but keep it aside and she either buys a share in the flat, or (if that harms her being a first time buyer) you put rhis aside and use it to pay off a chunk of her loan when she graduates