. As the founder of an investment firm wrote, he was considering buying a condo in his newborn infant’s name “and renting it out with the idea that by the time he grows up it’ll be owned free and clear.” Or, as a Wyoming parent wrote on a forum dedicated to the FIRE movement , he was considering buying properties— both under the age of 5. The idea was to Airbnb the houses and use the proceeds for the children’s living expenses until they came of age.
There are myriad legal structures to facilitate these kinds of transactions: In most places, a minor can technically own or co-own a house, though they can’t really do anything with it until they’re 18. “A minor generally cannot be a legal owner of real property, as taking ownership requires them to actually sign a deed,” says Russel Morgan, an estate attorney in New York, but he notes that a child’s guardian can sign a deed for them or the property can be administered by a trust.
So what does it mean to have a baby for a landlord? They won’t show up in court if you’re being evicted. In most situations, either a guardian or trustee manage the day-to-day financial health of the property, keeping records to prove that they’re making the most of the investment. These actors have “a fiduciary duty to preserve the assets and act in the best interest of the beneficiary minor,” says Morgan.
But putting a child on a deed does prove to be a problem if, say, the parents want to refinance or sell the property before the kid turns 18. In 2002,with a very particular problem: During a previous marriage, his wife had added her teenage son to the deed of the house the three of them now shared with the idea that, if anything happened to her, the son would automatically receive her $500,000 investment.
A baby landlord, then, is just a landlord. For tenants, their monthly payments are a trust fund maturing, and if there’s a dispute, a court-appointed adult will fight on behalf of the child-“housing provider” legally bound to ensure future financial gains. It strips the pretense from the transaction: A house isn’t a house so much as the world’s most lucrative investment account.
Where? Most adults can’t afford real estate in this housing market. Another relatable NY Mag story.