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 wouldn't charge if she were a student, but I'd expect her to keep it tidy (within reason), and if she started working and was still living there, I'd charge her nominal rent (not market rates).

I would find it incredibly mean-spirited to charge her rent as some kind of 'life lesson' on a property that YOU yourself inherited and did not 'earn' either in any meaningful sense. I'm not against inherited wealth - I'm living in an unmortaged home courtesy of inheritance from my late mother. I certainly wouldn't charge a student child to live in though. That smacks of making money off your child.

Charge her the equivalent of bills, etc. More than fair.

If you take the flat out of the equation what is your expected parental contribution as the government sees it re student finance? If she gets minimum loan due to household income there’s an expectation that you top up to maximum. If that is the case your contribution could be providing her accommodation as many parents do.

Given the student loans situation now plus rental reforms, in your shoes I would have DD live in the flat, have friend as a lodger paying market rent to her up to the £7,500 no tax threshold. DD uses that tax free income to cover all the bills and living expenses on the proviso that she doesn’t take out a maintenance loan.

If she also has inheritance then you could encourage her to pay tuition fees so she has no loan for that either.

We did this for DC1 and 3 friends-flatmates who paid a low rate but enough to cover running costs. We considered that our child being responsible for any maintenance and repairs was payment enough.

Maybe 1 flatmate’s rent won’t cover the bills but the property should appreciate in value, giving you some virtual return on your investment. I’d keep an eye on the first year’s expenses and consider charging your daughter half of the shortfall if (only if) she can afford it without taking out a loan.
Or start charging her on account and give it back if she’s paid too much (a bit mean spirited IMO, as you inherited the money to buy the property).

Otherwise if she’s responsible with money, not living beyond her means , she can use her own savings when she moves out and needs to put down a mortgage deposit/pay rent .

Quite ironic to charge her rent in order to teach her the value of money, when the money did actually fall into your lap. (I say that as someone who will probably inherit a lot of money. I didn’t work for it; it’s just sheer luck.) I wouldn’t charge my children rent unless I was in dire financial straits.

Why on earth would you want to charge your own daughter rent? You’re in the fortunate position of being able to make her life easier, yet you’re choosing to make it harder out of some warped sense of moral duty. At this rate, we’ll start normalising the idea that children owe their parents a literal debt - one they’re expected to start repaying at 18, as if their upbringing came with a running tab, like the kind of debt people raised in brothels used to be trapped into paying off.

Assuming that you are in a fairly comfortable financial position, her loan could be as little as £400 a month. The expectation is that parents top that up to a liveable amount- your contribution would probably be around £900 a month in a mid-range city- i.e. roughly the cost of accommodation. Unless your intention is to charge her rent and then hand it straight back, your idea is silly and also really quite mean-spirited to want your own daughter to pay to help you secure a valuable asset whilst she's studying.

God forbid we should help our children out when we have the means to do so eh?!!

If you don’t charge her she can take smaller loans and have less debt. Personally I wouldn’t charge. But that’s just me, working to pay my kids college/uni fees and living so they don’t start life off under masses of interest accruing debt.

Id ask her to pay bill and i would give hervextra money but no rent. Shea a child in ft education

How could you charge your own child?!? A student, at that. Breathtaking….

This!

Is it?

Thats news to people who dont have that option or believe that its good for young adults to learn to be responsible

OP has a good opportunity to do that in a safe way for her daughter. I would charge rent but make it very much lower than market rate for her and then market rate for the flat mate, whoever that happens to be

OP - what are the tax implications if any, you'll pay tax on the income but also capital gains tax when you sell. Make sure there isnt any implication on letting someone live in the property rent free/less than market rate as it could affect your tax relief. Check it all out first.

Yes, it is. As others have said, the government’s student loans system assumes that parents will financially support their children, according to what they can afford. It’s been like that for years. If charging rent that she doesn’t need just means that the kid has a much bigger loan then it make zero financial sense. I also said in a previous post that the students should be at least partly responsible for the bills, otherwise there’s no incentive not to be wasteful with electricity, water etc.

you just have a lovely flat for doing nothing, you were simply lucky enough to be born into your position.
do what you want obviously, but don’t imagine you have earned this property.

Im not necessarily talkinga bout the OP here, but what is assessed on paper is not always accurate. Some people (which is the point I was making), cannot afford that due to their circumstances and other committments which the government doesnt take into account. So blanket statements of 'part of being a parent of a non earning university student' are not accurate and are not helpful

All students should be working, too many 20+ young adults are leaving the world of study with not a jot of real life experience and its showing.

I wouldn't charge my student daughter to stay in a flat I owned. Especially if I bought it with money inherited from her grandparents
It would probably be different if she was working but definitely not while she is studying.
We paid for our children's accommodation while they were students because their loan didn't cover it.

It shouldn't be news if you have children or are acquainted with the student loans system.

Student loans are tapered based on parental income. Why do you think that is? Did you think it was because they decided kids from privileged backgrounds need to learn what it's like to live on beans? Parental contributions are assumed, because most parents care enough about their kids to want to support them at University as much as they are able. The idea that parents might attempt to take a chunk of their own child's loan so they can put it towards purchasing an asset for themselves in pretty shocking tbh and certainly doesn't meet any threshold for "responsible".

Furthermore, the maximum loan for a student living outside of London is £10,554 pa. That's less than the cost of rent in many universities. Some students get jobs but anyone doing a more intensive course is going to be immediately at a big disadvantage if they have to do this, and that's if they CAN find a job, which isn't always possible. Spending 9-5 Mon-Fri in lectures and clinics and then adding shifts in at the pub or supermarket in between is also not "responsible".

I am not sure why you would charge her anything but if you must then make it a nominal amount. You can then quietly save this in a separate account to give to her once she graduates.

You bought a flat for “totally nothing” and you didn’t have to do anything for that money to fall into your lap. Has it made you a bad person? Ungrateful? No, so give her a break!

Well, that's debatable considering she wants to take a teenager's student loan off them.

Not all universities allow students to work in term time.

Do whatever you can to ensure she doesn’t have to get a loan IMO. Is there a mortgage? Will the flatmates rent cover any costs to you?

For me it would probably depend on whether she (and your other kids) are generally good with money and aren’t taking it for granted that they won’t pay rent. Assuming you don’t particularly need the money, and she’s generally sensible and plans to work hard, I’d probably not charge her (although check with your insurance etc in case you need to charge her a nominal amount so that she’s classed as a tenant).

Exactly what I was going to say - the irony of the OP sitting on her inheritance while saying she wants to teach her daughter things don’t fall into her lap 🤣🤣🤣.

That is light hearted - I do understand the sentiment of wanting to teach the value of money to your kids - I think I’d maybe get a small rent but put it in savings for her.

What would you charge if she was living at home with you? If she’d rent free at home and and you can afford it, I’d let her live rent free in the flat too. I wouldn’t be paying anything additional on her living costs though