Living in your child’s investment property 🤔
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
A question was asked in the Facebook group recently about the pros and cons of moving into an investment property bought by your kids:
Any thoughts around the idea of your children purchasing an IP, which you then live in post-retirement, paying market rent? Or joint property ownership with your child/ren so each party does not have to invest as much? Has anyone done anything like this to enable more funds from the sale of PPOR to boost super?
I love that this person is keen to explore all available options. That’s what personal finance is all about—considering all the options and finding what’s right for you. I’ve recently bought into a commercial property with a few parties and whilst not being a residential arrangement this idea of pooling money to invest in property is front of mind. Here are my thoughts on this:
1. Do the numbers stack up?
Whether you moved into your child’s investment property or bought a property together I’d want you to do the research on the following:
Market rent vs. pension impact – Will paying rent affect any of your government benefits? (as opposed to being a homeowner without rent)
Tax implications – Will your kids be hit with extra land tax, capital gains tax, or other costs?
Cash flow & buffers – Can you comfortably afford rent long-term, even if expenses rise?
Property costs – Who covers rates, maintenance, and unexpected repairs?
Downsizer contribution – would you invest part of the profit of your current home sale into your superannuation as a downsizer contribution? Read this article for more info on this.
This assessment is purely looking at the numbers, not the emotional aspect of living together or investing together.
2. Compare your short and long-term plans
It’s easy to assume things will go smoothly because, well, it’s family. But life changes—your needs will evolve, and so will your kids’.
What happens if one of you needs to exit the arrangement?
If your kids want to sell the property, where does that leave you?
If you decide to move elsewhere, will you still have the financial flexibility to do so?
What legal agreements need to be in place to protect everyone’s interests?
Can you agree on what kind of property you both want?
Having an exit strategy isn’t about being pessimistic—it’s about being prepared. Too many people go in thinking “she’ll be right”, only to find out later that it’s not all good when plans don’t align.
3. Consider relationship impact
Mixing family and finances changes the dynamic—it’s no longer just a parent-child relationship, it’s more like a business arrangement:
Will this create tension if financial stress comes into play?
Do you have clear boundaries between personal and money matters?
Will living so closely impact your independence or theirs?
Even with the best intentions, things can get complicated. If you’re going down this path, make sure it’s not just financially sound but also a setup that keeps family relationships strong.
I'm generally not a fan of these types of things because I've seen so many things go wrong because life changes. If you have gone into a property arrangement with your kids, I’d love to hear how it’s worked or not.
Community question
Community member says: For those between 60 and 70 who have retired, what kind of split do you have between growth and defensive assets in your portfolio, and how have they performed over the last few years?
Glen says: This question was directed toward the whole Facebook community but I wanted to share some thoughts on it.
The biggest driver of returns in your super isn’t just which fund you’re in or how low your fees are—it’s your asset allocation. That’s the mix between growth assets (like shares and property) and defensive assets (like cash and bonds).
If you’re fully in cash, your returns will likely be lower than someone with a mix of growth and defensive assets. But at the same time, too much growth exposure can mean big swings in value, which isn’t ideal if you’re drawing from your super soon.
A good rule of thumb? Many retirees keep at least a few years’ worth of pension withdrawals in defensive assets (like cash and bonds) so they’re not forced to sell growth assets when markets are down. That way, if a market downturn hits, you’ve got a buffer while waiting for things to recover.
