Case Study: Broke Sister-in-law

[Captain DIY]

Hi all, here's the scoop.
I don't know all of her numbers exactly, but my wife and I were going over what we do know last night and trying to figure out some things. My sister-in-law, let's call her Norma, lives near Boston and is a single mom. She works in early child care making $13.75 per hour and pays rent of $1780 for a two-bedroom apartment in a large housing complex. She pays much less than those around her due to the length of her tenure there, and her rent is about to go up in April by about $60. Her parents cover her cell phone and help with her rent, and she gets $800 per month from her deadbeat ex in child support. She has zero savings, and fortunately zero credit cards or debt, but her credit is shot.
My wife and I have been trying to convince her to move out to our area, which is much more rural and WAY lower COL. She wouldn't be able to get a rental due to her lousy credit, but we have been thinking of getting a rental property anyway. If we can get a duplex and rent one side to her, she'll have a place to stay for about 1/3 the cost of her current housing, and she could get a similar wage job. The housing market is pretty hot in my area right now, so It's hard to find a good deal. Any ideas for her to change some things around in the meantime? Any ideas on things I haven't thought of at all?

[marty998]

I don't think this is a good idea. You know she's needs other family help to get by and yet you think she is a good investment prospect for your prospective rental property?

Lots of people here will say never mix money and family.

Have you talked to her about her goals and what is her plan for the next few years? Perhaps that would be a good starting point. Your SIL can only be "saved" if she's onboard with the plan... and I'll bet to get it to work you're going to need to get her to come up with that plan, rather than you and you're wife knowing best.

[Captain DIY]

I don't think this is a good idea. You know she's needs other family help to get by and yet you think she is a good investment prospect for your prospective rental property?

Lots of people here will say never mix money and family.

Have you talked to her about her goals and what is her plan for the next few years? Perhaps that would be a good starting point. Your SIL can only be "saved" if she's onboard with the plan... and I'll bet to get it to work you're going to need to get her to come up with that plan, rather than you and you're wife knowing best.

We are definitely not looking at her as an investment tenant, we would just be providing her a place to live and build up her credit. And my wife is very clear about what would happen in the case of missed payments, she doesn't mess around with that kind of stuff. There has been a lot of talk recently about goals and where she wants to be in her life. She was also born extremely prematurely almost 40 years ago when health tech was not nearly as good as it is today, and her cognition has suffered as a result.

[Tuskalusa]

I guess my question is “why would you have her pay rent at all?”  It sounds like she needs consistent family support. She needs to get back on her feet. It sounds like missed payments could be an issue.

I’d say only buy a rental if you can break even with the first unit. Then just let her live in the other unit where she covers her own utilities and such, and maybe manages the other unit.

[Frankies Girl]

Has she asked you to do this for her? Have you had any discussions with her at all, or is this something you're just discussing with your spouse?

Even if your wife says she'd be firm about missed payments... why take on the LARGE responsibility for her housing if she may default? I find it hard to believe that she'd going to kick out her sister if she gets behind on a few payments, so this likely will end up being a huge mistake if she is untrustworthy in any way. You don't need to tie yourself financially to someone to help them. 

And if she has asked for help, why not consider smaller, likely better steps first: sit down with her and get actual numbers, see where she could cut, ways to improve her credit, find housing that might be cheaper in her current area, job training or opportunities to earn more... there are so many other easier and likely better options than uprooting her entire family and plonking her down in your area with a rental house* you own.

So you're proposing to take her out of the environment she's familiar with to what purpose?

She won't make the same money as a childcare worker in a rural area. She'll likely need more funds even if she has subsidized rent, have very little friend/family network available other than you and spouse and need to lean MUCH harder on you. As she has kids too, she'll end up having higher expenses for them as well (and what about visitation and such with the dad?). And that is also

*There is no profit in it for you, so saying you were thinking of a rental property is not the true situation no matter how you pose it. You're going to buy a house to offer to her for reduced rent. Meaning you will have a property that she and her kids will be likely not taking super awesome care of, and you'll be on the hook for mortgage/insurance/maintenance and other than the intrinsic value of the property itself, it won't be a true money-making rental. It's a huge family subsidy. Likely even larger than what her parents currently manage.

[farfromfire]

I don't think this is a good idea. You know she's needs other family help to get by and yet you think she is a good investment prospect for your prospective rental property?

Lots of people here will say never mix money and family.

Have you talked to her about her goals and what is her plan for the next few years? Perhaps that would be a good starting point. Your SIL can only be "saved" if she's onboard with the plan... and I'll bet to get it to work you're going to need to get her to come up with that plan, rather than you and you're wife knowing best.

We are definitely not looking at her as an investment tenant, we would just be providing her a place to live and build up her credit. And my wife is very clear about what would happen in the case of missed payments, she doesn't mess around with that kind of stuff. There has been a lot of talk recently about goals and where she wants to be in her life. She was also born extremely prematurely almost 40 years ago when health tech was not nearly as good as it is today, and her cognition has suffered as a result.

Please be specific - after how many missed payments will you evict her? What if she cannot find somewhere else to live and you are the only person she and her son knows in the area? What if she can't keep her job?
Talk is cheap, in the parlance of our times. Evicting your single-parent sister ain't nearly as easy as you're implying, and will irreversibly damage their relationship.

This is a very bad idea, but if you go along with it at least be honest with yourself.  You are buying a house for her to live in, possibly forever, possibly for free.

[former player]

If her Ex is paying $800 a month in child support and it actually reaches her bank account on time then he is doing better than a significant proportion of non-resident fathers and quite possibly doesn't deserve the epithet "deadbeat".

Your SIL is not in debt, which is good.  She doesn't have any savings, but 40% of the population don't, and it's hardly unusual for a single mom in a low-paid job.  She has her parents' support, which is good.

I would not suggest moving her from her job and everything she knows.  I might have considered suggesting a one bed apartment but if she's getting a deal on a two-bed that might not make a big difference.  (How old is the kid?  The younger the kid, and the more the kid is the same sex, the more possible a single bed would be for a while.  But even so it's probably a limited benefit for a limited time.)

If it were me, I'd leave well alone.  Just make sure the kid is getting a good education so that the next generation can do a bit better, yes?

[Tuskalusa]

I agree with Former Player. Maybe invest in education/supplementing her kid, as needed. That would go a long way.

[dreams_and_discoveries]

Em.....am I missing something?

SIL is making ends meet with some family support, working and raising her kid alone - presumably she lives in an urban environment that she enjoys and will provide lots of opportunities in the future for both of them? And her kid is doing well?

Why the desire to interfere in her life, and question her life choices? Has she asked for assistance, or indicated a desire to move?

[human]

If you do this guaranteed in a year you'll be back under a throwaway name asking everyone how to get rid of the deadbeat sister in law tenant without ostracizing that whole side of the family and fucking up the little kids school year. Stay away very fucking far away.

[Captain DIY]

Ooh boy, I guess there is a lot of backstory and other stuff I didn't think about when I posted this. I appreciate everyone chiming in, but without getting too far into personal details I can't explain the situation properly any further.

[Villanelle]

I think it is a mistake, and not for the reasons mentioned thus far, or at least not only for those reasons.

I don't think you are helping her by just throwing money at the problem, and making her reliant upon you. Instead, if she wants help, I would help her by finding what programs she qualifies for (WIC, disability, Section 8 or other housing assistance, food banks, etc.), helping her set a food budget (find a stable of cheap meal she can cook), helping her look for a cheaper place*, etc.

That's a real gift, not throwing your money at the problem and creating a situation almost guaranteed to degrade or destroy family relationships, while not showing her how to live within her means in the long run and also uprooting her from her job, support system, etc. 

If her credit won't allow her to get a place and you are so willing to put your own finances on the line, consider cosigning for her. Not something I'd usually recommend, but if you are hellbent on going that far to help, to me that makes more sense than buying a house and moving her in.  At least that way, after a year you can pretty easily (or at least more easily) walk away, than if she's a tenant in your rental.  Or even prepay her rent and have her pay it back to you monthly.  Again, you are at risk, but at least it's only for a year. 

[former player]

As you say your SIL has no debt but her credit is shot, I'm guessing some financial shenanigans have been going on somehow?  Perhaps someone in her immediate neighbourhood who is taking advantage in some way and you think the best/only way to deal with it is for her to move?

If this is the case it might be better for someone (her parents?) to take a power of attorney, or have some form of guardianship.  And perhaps look for available public resources that provide social support and safety networks?  And if there has been fraud or some form of abuse then legal action, either through police involvement or a civil court order might have an effect.

[11ducks]

If you are looking to support her, you could offer a certain amount towards tuition/school fees? If she can upskill in her career to a position with more money (Childcare room manager Etc)- this could really help? What age are her kids? 0-5 is horridly expensive- as the child/children get older, it may be easier for financially?

[Dicey]

If her Ex is paying $800 a month in child support and it actually reaches her bank account on time then he is doing better than a significant proportion of non-resident fathers and quite possibly doesn't deserve the epithet "deadbeat".

My former BIL paid this much to my (deadbeat-ish) sister until his son reached maturity. It was garnished from his wages by court order. He never saw his son. Didn't call or return phone calls, or messages, no birthdays, holidays, nothing. Deadbeat doesn't even begin to describe him. There are plenty of epithets he does deserve, DEADBEAT is merely the first one on the list.

Back to the main topic. Captain DIY, are you factoring in Massachusetts' excellent social services, including healthcare? They are not insignificant, especially for low wage earners. Unless and until she specifically asks for help, keep saving your money. If she's like my sister (who's a good mom, BTW), the wheels will fall off her bus when the child support stops. Leave her alone for now, but be ready to assist then, IF she asks.

[Goldielocks]

If her Ex is paying $800 a month in child support and it actually reaches her bank account on time then he is doing better than a significant proportion of non-resident fathers and quite possibly doesn't deserve the epithet "deadbeat".

Your SIL is not in debt, which is good.  She doesn't have any savings, but 40% of the population don't, and it's hardly unusual for a single mom in a low-paid job.  She has her parents' support, which is good.

I would not suggest moving her from her job and everything she knows.  I might have considered suggesting a one bed apartment but if she's getting a deal on a two-bed that might not make a big difference.  (How old is the kid?  The younger the kid, and the more the kid is the same sex, the more possible a single bed would be for a while.  But even so it's probably a limited benefit for a limited time.)

If it were me, I'd leave well alone.  Just make sure the kid is getting a good education so that the next generation can do a bit better, yes?

+1 to this,   she needs to get a better paying job and / or much lower cost rent.  With Early Childhood Educator, lower cost rent in the suburbs is entirely possible to find adjacent to an employer.