Your Landlord Might Be a Baby

Photo-Illustration: Curbed; Photos: Getty

“I’ve said it before, and I’ll say it again. Every child that you have — purchase a house for them,” Wayne Turner, a broker in New Orleans, says as a camera pans through a charmless, beige three-bedroom in Wasilla, Alaska. And again at a new construction in Davenport, Florida, staged in shades of cobalt. And inside a San Diego bungalow. Turner’s advice, which I like to call the baby-landlord thesis, is a popular remix on TikTok: Parents are told to purchase a property and install tenants until their child turns 18, at which point the kid could either sell the home to pay for school or use that equity to buy a new place near the university of their choice. After spending four years pursuing a degree and collecting rent from their roommates, the college house could be sold, a cycle through which, Turner says, a child’s real-estate holdings “pay for living expenses and just build wealth.”

There’s more than one way to make a child landlord: There are the Willlow Tufanos and Tyson Georges of the world — teenagers who throw money earned by reselling junk on eBay at other distressed assets, buying properties and taking advantage of bottomed-out markets to flip houses for cheap. (“I was inspired and driven by … how it was so easy to make money,” George said.) For oligarchs and war criminals, deeding a mansion to a young next of kin is a popular way to evade seizure — even if that relative is still in elementary school. But Turner’s brand of child wealth-generation feels more distinctly a product of the American middle and upper classes fueled by house flippers and investment blogs with names like Financial Samurai and Semi-Retired MD. It isn’t quite the old-money practice of a trust or buying adult children their first homes when they graduate college or get hitched. Instead, the one-house-per-kid theory, among the merely wealthy or strivers, is a path to a de facto college fund (or an insurance policy in case the child, in the words of one blogger, “can’t launch”) and a way to impart the wisdom of the self-made before a child can even walk. Like reading Rich Dad Poor Dad to the kids before bed.

The phenomenon is not new, but about a decade ago, with mortgage rates relatively low, real-estate brokers saw more parents buying their children apartments in New York City. “The parents see it as a long-term investment and a good place to park their money,” one told the New York Times. Around the same time, an idea began percolating on landlord forums. 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 (Financial Independence, Retire Early), he was considering buying properties for each of his children — 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. But, he added, he was thinking about buying in two different markets and worried that if the properties appreciated at different rates, it could cause tension down the line. (In some cases, it’s a reaction to a certainty that, with interest rates trending ever upward and each generation faring worse economically than the previous one, there is no way a person’s progeny will be able to find an affordable house.)

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. If they mismanage the property or end up owing municipal debts, they can be removed and replaced with someone savvier when it comes to wringing money out of a home. But as long as the place is turning a profit, quite a bit appears to be fair game. A decade ago, a guardian took a minor’s state payout and spent $84,000 on a Texas property in their name with an intent to renovate and sell. The local government concluded that it was acceptable for the kid to own the property, and for the guardian to have taken the money, particularly since she was a realtor and appeared to be treating the child’s assets with the appropriate level of care. Essentially, kids who own property are shadow partners in a very profitable, very removed enterprise until the second they turn 18.

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, a Midwesterner wrote to an advice column 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. Now they were selling to move to a “nicer, bigger” house, and he seemed incredulous that the family would have to find an independent guardian to protect the son’s interest in the home. The real-estate advice columnist was straight and to the point: “Your situation is a classic example of why parents and grandparents should not add, convey or will real estate titles to minors,” he wrote.

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. “Our reasoning is that a tenant can be contributing to this fund instead of doing so ourselves,” wrote one commenter who planned to give each child a place they could rent out when they became adults in lieu of a more traditional college savings account. “Thanks for agreeing we’re not terrible parents!”

Your Landlord Might Be a Baby