Buying an apartment for your adult child? Here are 7 things to keep in mind

With Manhattan median rent hovering above $4,000, many parents who can afford it often decide that buying a New York City apartment for their adult child is better than helping pay their rent.

"It's becoming a more typical state of affairs rather than the privilege it was viewed as earlier,” said Dean Roberts, a longtime co-op and condo attorney at Norris McLaughlin in Manhattan.

Frances Katzen, a broker at Douglas Elliman, agreed, saying it's a popular option despite current high mortgage interest rates. "Parents are still taking the opportunity to buy because there is so much wiggle room on the final sale price, and since most of these parents are going to put down at least 50 percent, off-setting the sensitivity to the rate because they are not taking the maximum amount," she said.

She added that anticipated adjustments to mortgage rates "will allow people to feel a little ‘braver’ about stepping in now to get that great price they may not be able to get once the rates start coming down."  

Financing aside, this type of purchase is more challenging than a typical one. Read on for tips on what to expect and how to prepare. Be sure to check out Brick Underground's step-by-step guide to buying an apartment in NYC too. 

[Editor's note: A previous version of this post was published in December 2023. We are presenting it again with updated information for February 2025.]

1. Set clear expectations before you begin 

Before you do anything, make sure you and your offspring understand some key points. Will your child contribute to the down payment? Who will pay for carrying charges, utilities, and repairs? Will there be roommates? If so, how will they be selected, and will you have any say in the matter? Can dear old Mom and Dad stay there when they come to town? Leave as few gray areas as possible. 

2. Get agreement on the 'must-haves' 

Knowing what you and your child deem must-haves versus niceties will help you focus your search. Things to consider include what you each want in a neighborhood, transit access for getting to school or work, and security issues—for example, is a doorman building a dealbreaker?

Discuss other "essentials" as well, such as an in-unit washer/dryer, private or shared outdoor space, a gym, or a swimming pool. But be realistic about what will actually be used, as you will be paying for it. 

3. Beware of co-op restrictions around buying for children

One of the first things you’ll notice when looking at NYC real estate is that co-ops are significantly cheaper than condos. However, co-op rules tend to be stricter, often allowing only the primary owner to live there.

Look at a listing beforehand and see if it explicitly allows parents to buy for kids. Many listings will specify this. If it doesn't, don't assume it's not permitted—ask the seller's broker before moving ahead so you don’t waste your time. 

While there's no hard-and-fast rule regarding which kinds of co-ops are more likely to allow this situation, the high-end buildings on Park and Fifth avenues and Central Park West are generally less amenable than buildings with less fancy addresses or smaller co-ops.

“There can be an inherent resentment among board members and tenants who went out, got jobs, and paid for their apartments, and now these kids are coming in," Roberts said. "As a result, and wrongfully or not, owners whose parents bought their apartments are often viewed as privileged, and there’s a real worry that ‘the guy’s not paying, he’s young, he’s new to the city, and he’s going to be throwing all-night parties and disrupting our way of life.'"

Often, though, the policy is based on an abundance of caution by co-op boards—entities that tend to be very risk-averse. (Potential buyers aren’t just future neighbors; they’re fellow shareholders, so real economic self-preservation is at play.) 

If you do find a co-op that will allow parents to buy for children, Abra Nicolle Nowitz, an agent at The Corcoran Group, suggested that parents consider co-purchasing with their children rather than simply purchasing the apartment for them outright or acting as guarantors, depending on what the building's rules permit.

“Co-purchasing may strengthen the co-op package as it could reassure the board that the responsibility is shared between both parent and child,” she said. Know that not all buildings allow co-purchasing.

“I recently had a closing where the parents and adult child were buying as co-owners, but the co-op didn’t allow it,” said Adam Stone, an attorney at The Stone Law Firm. “The co-op wanted only the adult child to be the owner since he was the only one living there. The co-op preferred to have the parents as guarantors instead. I was surprised by this. From a co-op/landlord’s point of view, I thought it would be cleaner to have all of them on the stock and lease."

He continued, “The main point is to see what the building prefers or requires so it can be addressed in the very beginning, and everyone can agree early on that this is the right buyer for this apartment."

4. Consider buying a condo 

Sure, it will likely cost more, but condos are more flexible when it comes to board approval of new tenants, especially if you find a sponsor unit where no board approval is required. 

Co-ops often have restrictions on foreign buyers, so if you’re not from the U.S., you’ll likely have to go the condo route. In addition, condos typically don’t require an in-person interview, which can be a real benefit if you are overseas or out of state. 

Another reason to lean into condos: "One of the things we are seeing right now is parents are really preferring to buy condos versus co-ops so they can make it an income-producing property long-term to set their child up," Katzen said.

5. Be upfront with the board

Regardless of whether it’s a co-op or condo, you need to be transparent with the board about what your intentions are from the start. Also, let them know if you and other family members plan to stay there for an extended period of time or whether your child plans to have roommates.

Keep in mind that you risk more than just angering your neighbors if you’re not honest about how the apartment will be used and who will live there. Consequences can include paying a fine or being sued for misrepresenting yourself to the board and for non-compliance with the house rules of a co-op or condo.

6. Find an experienced real estate agent 

One way to avoid potential problems is to work with a great broker who has lots of experience selling apartments to parents who are buying for their kids. You want someone who is knowledgeable about which buildings will allow this type of purchase.

“If a co-op or condo board has a set policy against such purchases, the board will most likely not change their mind about it, even though I have seen that change happen on occasion,” said Barbara Fox, president of Fox Residential, who bought an apartment for her niece. “A good broker should research a board’s requirements and know ahead of time how to avoid a problem." 

A good broker can also help you assemble a package that has the best chance of being approved. For starters, brokers typically know the particular quirks of different boards and buildings. Most importantly, a broker can flag any possible causes for concern in an application and address them—generally, the fewer questions raised, the better. 

Katzen said she often works with parents buying for children and encourages them to consider the property and its resale potential with the utmost care. Two types of housing she won’t take her clients to: walkups and railroad apartments, both of which turn off many potential buyers. “Railroad apartments in the East Village are pretty cool, but when I show them what happens with resales, [buyers] rethink their plan,” she said.

7. Co-purchasing may make the most sense

According to Mordy Husarsky, an executive vice president at Federal Savings Bank, parents should strive to list their children on both the purchasing and loan agreements, rather than just themselves.

“It presents a lot of challenges [tax deduction-wise] when they don’t because, by definition, this type of an arrangement doesn’t technically fall under the category of an investment property or a second home, especially if the parents live out of state," he said.

Be aware that when a parent helps their child buy, it puts a liability on their name.

“If the parents want to buy another house or refinance, they will have to account for this liability, even if the child is the one making the payments,” Husarsky said. The only time you’re not responsible is if your child has been making the last 12 months of payments.

“Your child should be in their career at least three years before committing to owning equity," Katzen noted. "People start over—maybe they decide they don’t love law school and want to be an actor instead. It behooves them to actually earn and save and contribute along with parents."

In the current sales market, putting down a substantial amount to offset higher mortgage rates is an important strategy that can help reduce the monthly nut your child is responsible for, Katzen said.

Not all co-borrower scenarios will pass muster with a board, however.

Some co-op boards may "insist that both borrowers be on the stock and lease, which may have estate planning implications for everyone," said Marc Kunen, a mortgage consultant at Prosperity Home Mortgage. Others may require that the child meet a certain debt-to-income ratio regardless of the income and asset position of the parent—and this ratio may be different than the bank's requirement.  

Moreover, some lenders simply won't deal in so-called "kiddie" loans, in which parents and child are listed as co-borrowers, Kunen added.

"In order to make this work, you have to find a lender who allows 'non-occupying co-borrowers' to be on the loan," he said. "Each bank uses different rules in approving these cases." Some banks will not do it all, while others require that "the occupying borrower be employed with suitable income," he added. 

In the case of a recent college graduate who Kunen was representing, "a letter from the employer confirming position, income, and permanency of job was required to assure the lender that the [borrower] has a likelihood of long-term employment."

Alternatively, some lenders will combine the debt-to-income ratios of both borrowers and use this blended ratio to qualify the loan.

"The bottom line is to make sure the real estate agent and a mortgage professional advise the buyer of all the buying and borrowing possibilities before signing a contract or loan application," Kunen emphasized. "I have seen too many cases where issues arise after contract signing that should have been vetted if everyone discussed the situation in advance." 

—Earlier versions of this article contained reporting and writing by Tripp Whetsell. It was updated for February 2025 by Evelyn Battaglia.

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