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.

Surely you would be paying her rent at uni? Sorry but confused here. It is usual for parents, who can afford it, to cover living expenses whilst a child is at uni. My parents did it for me and I will do it for my children. When they graduate that is different as they have to go out and earn and pay bills like everyone else.

Our DD just had the flat when at uni. You have not even had to work for it! Just take the rent from her friend. We didn’t charge other DD when she lived in it for a bit either. We gift DC £3000 a year for IHT purposes. It’s just how we manage money and we like to help.

I wouldn’t charge while she’s still a full time student.
We always paid for DDs’ uni accommodation.

However after she’s graduated and is working, definitely.

The state of students loans at the minute means I would do anything to keep my kids from needing to take those loans.

It sounds like shed need to take her tuition fee loan. So you can save her the maintenance loan. She can work to pay for bills and fun money and thats a big ask, it won't be easy.

Id use the rent from the other student to pay off her student loans. You can make overpayments at any point.

If she can leave uni debt free she will be in a fantastic position and shed have had to develop a work ethic to pay her way.

I'd do it in a heartbeat.

Lots of parents pay their student DCs rent and the DC lives on the minimum loan. Not much point in giving her money for rent and then her paying it back to you. You may have to pay tax on it as well.

She will still need to budget for the other bills, food etc. so the learn to budget argument doesn't hold either.

My answer would be different if she was working full time.

It is absolutely expected that parents contribute to DC’s uni expenses.

Not sure why you’d be trying to make money off her when it hasn’t cost you a penny to buy this flat.

You would probably have to fund something. So you would give her some money, that she then gives you back as rent and as an extra bonus you have to pay tax on it too. Utterly pointless.

Really, I find it very hard to understand a few of these replies. Do parents believe that responsibility stops when their children have finished school?
As I stated up thread, we paid for all our children’s living expenses while they were at Uni. We also paid for their tuition fees. Hands up, only 1 of them had the super high fees of today. This level of support was normal among their friends. My children did not work while they were at University. They did degrees that required full time studying. They both worked during the summer holidays.
I appreciate that not everyone can afford this but we started saving when they were young. We didn’t go on expensive holidays multiple times a year. We had one long haul holiday when they were teens but mostly we did things like Eurocamp. My sister, who is a single parent, went without a lot to pay for her child to go through uni.
It is not great for your children to start their working lives with debt. Not working while at Uni did not stop them getting good jobs and they fully intend to do the same for their own children.

Of course you are under no obligation to support her, she is legally an adult. However… if you can help, doing it early in her adult life is (financially) far more effective than the same amount of money later in life, with the caveat that she needs to be sensible and take advantage of the help the right way.

I plan to pay for my children's Uni costs so they come out debt free, not sure how yet, but that's my plan.

So no, if you're fortunate enough to own the flat, just see it as a massive accommodation cost saving and don't charge her. There's plenty of time in her life to learn the lessons of having to pay bills, but for now let this be one less thing for each of you to concerned about.

I would make her pay rent and then either pay it off the loan at the end of the year
Then going forward if you can afford it prepay the loan in lieu of the loan or continue.

When I was at uni it was more normal for most to have to pay their own rent and get jobs to have to do so.
It meant we all learned to manage money - sometimes badly. Eating a bag of potatoes for a week as we'd spent too much on beer and fags. But young people now aren't as stupid as we were. But they will spend it in coffees and ubereats😂

But we came out (mostly) knowing how to budget and adjusted through the years to live to our means.

Conversely, a few of my peers who had their rent paid and a student loan, no jobs to worry about at uni, have never seemed to get out of the flippant mindset and are the ones now with credit card debt, loads of things on finance etc. As they've climbed the career ladder their spending has never really caught up.

This is just anecdotal within my own uni group who are still very close

And also between my sister and I who were treated very differently by my parents when we went to uni (though she did have a bursary and I didnt)

No not while she is a full-time student, not if you don’t need the money. I would expect to cover living costs myself while DC are studying.

But yes once she is finished studying then you should charge rent. I don’t agree with all this “oh I could never charge my children rent” rubbish. Once working full-time (or near enough), they should contribute.

I understand OP you're not trying to make money off her you're just trying to set her up for the real world so she isn't spoiled. I would charge her a small amount but put the money away without telling her and give it to her later in life. It'll be a lovely surprise for her.

In your OP you said you don’t think she should get a lovely flat for totally nothing. But you got a lovely flat for totally nothing!

@Canadianskates

this is an easy one IMO.
You dont "need" the money and will prob want to help later with younger kids.

Teach her about finances and compounding.

Have her pay her share of the bills and set up a SO for whatever the rent would be into your account and you pay that either into your own ISA (if not using the allowance) or into one in her name (if you are).

Help her set a budget and spending and saving - she made want to add more to the isa

It also means all kids are treated fairly and have the same ops.

If its a flat I'd be asking her to cover her share of bills and her rent would be the amount to cover her share of the service charges, (assuming there are some).

I'd let her live rent free because you'd be paying her rent if she was in halls. She can pay bills like water and electricity.

When I was a student my parents bought a flat and I lived in it. I paid the mortgage, bills, etc. It was cheaper than rented accommodation so I saved a lot of money.
When I graduated, they paid off the mortgage and now rent it out. But they are very generous and put aside all profit from it to provide me with a leg up onto the property ladder myself. Now that I'm a home owner, they take the profit themselves as a retirement income.
It works out well for everyone and I never felt hard done by. I appreciated a) the fact the mortgage was less than rent and b) my landlords were excellent!

Either rent-free or charge reduced rent and put it aside for her.

Whilst at uni no I wouldn’t charge if I didn’t have to. Once out of uni and working full time yes.

Just a minor point but if she's only getting a small student loan it may well be worth paying it off for her. The interest is dire so they can spiral before they leave. Generally I think it's worth either seeing it as a tax and so taking the max or trying to no take it at all. Check figures.

Yes, God forbid a parent might have to be out of pocket whilst supporting their child at university, not when there's an opportunity to make money out of said child.

FFS!

Why don't you charge her a small amount and put it in savings for when she's ready to buy her own house?

Lots of parents pay their children's university accommodation fees though, so I wouldn't overly worry about this being a problem.

If it was mortgage free I wouldn’t charge rent. She would pay the bills though. Alternatively, like others have said, charge a small amount and save it for her. It all depends on how much actual money she has as a student.

This