Author Topic: Bad idea to buy and manage house for disabled relative?  (Read 2424 times)

seattleite

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Bad idea to buy and manage house for disabled relative?
« on: May 06, 2021, 08:08:57 AM »
My brother-in-law is bad with his finances, gets social security disability, smokes, and is not going to be able to renew his lease. So we are trying to help him find a place to live. It may be difficult to find him another rental in this small town in this short amount of time given his problems in the past and his smoking habit.

We want to help him manage this transition and in the process help him manage his finances.

He currently receives $1200/month in net income and pays $750/month in rent.

I would love for him to be able to own a house but heís just not able to manage things like cleaning and maintenance himself. He just doesnít do it. Heís not a bad guy, just not very good at being an adult.

We are FIREd and have lots of cash to deploy quickly if needed. We are thinking about buying a house for him to live in. It looks like we can get a decent enough house around here for about $40k.

I know that renting to family members is a bad idea. I know this. But if we did this and ran it like a business with the intent of breaking even at some point far in the future, could we do this in a way thatís not completely stupid crazy for everyone involved?

Maybe create an LLC that owns the house and manages the money that he pays in rent?

If he pays the same $750 to the LLC then we could manage the maintenance and have it professionally cleaned regularly. It should be more than enough cash flow to eventually pay it back.

I guess we could also get a financial power-of-attorney to help him out. Heíd probably agree to this. We already do this for this health since heís not very good about making doctors appointments.

Heís not very healthy and honestly wonít live for too many more decades. We could sell the house when itís no longer needed by him.

Too crazy?

Sibley

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #1 on: May 06, 2021, 08:15:28 AM »
There is a lot of potential pitfalls here. Legal and personal. If you do this, throw out the idea of making the money back. You might, you might not, but go into it with the emotional understanding that you are never getting the money back. Otherwise it'll just poison your relationship. This would be an entirely charitable exercise to ensure your BIL has a decent place to live. Yes, charge the rent to cover maintenance, repairs, taxes to whatever extent that it will, but plan on it being a money sink.

I don't know if an LLC is needed. You might want to consult with a lawyer familiar with his benefits to ensure that you don't accidently mess up eligibility.

Villanelle

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #2 on: May 06, 2021, 08:47:36 AM »
Is he going to keep paying that $750, or is he going to look at this as an opportunity to blow more money? Sure, rationally, he's been paying it so he can afford to keep paying it to you.  But that's a different question than whether he will keep that same mentality and actually do that.   And is he going to smoke in the home, costing you potentially tens of thousands of dollars to fix it up when you try to sell or rerent?  And if he can't keep up on cleaning, what do you think that will say about the condition of the property?  Someone who "just doesn't clean" is not someone you want living in and caring for a major asset.  If you do this, consider charging him more and including a mandatory monthly (at a minimum) housekeeper. 

You say you would "run it like a business".  Well, would you rent your business rental to a smoker?  And are you prepared to evict him if he doesn't pay or pays partially?  And will you charging FMV and increasing rent annually as appropriate?  If not, then no, you wouldn't be running it like a business. 

This is a bad idea if you aren't willing to shovel a lot of money into him and his choices. 

jrhampt

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #3 on: May 06, 2021, 08:54:50 AM »
I agree with the posters above.  He sounds like a good candidate to get on a waitlist for subsidized housing or maybe if you insist on helping him out, look into a mobile home as a cheaper option?  The smoking is going to tank any property values, along with no maintenance.

former player

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #4 on: May 06, 2021, 09:08:28 AM »
$40k for a house that you get $750 a month rent on?  The 1% club should be all over that as a money-making proposition, even including paying money for a regular cleaner.

A financial power of attorney would take care of the potential for BIL to take financial advantage by not paying rent.  I would suggest limiting the power of attorney to the paying of rent so as to leave BIL in control of the rest of his finances.

If there is the potential for subsidized housing for BIL I'd get him on the list for that as well if it might mean it would free up more cash for him at some point in the future.

I don't get why having a smoker in the house would cost tens of thousands in cleanup?  It is presumably a house of very modest size, and a few thousand at most would pay for a deep clean and re-paint with stain-proofing paint.  It might be worth mentioning to the insurers that a smoker lives in the house, just to avoid any issues on a pay-out if he does set fire to it.

yachi

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #5 on: May 06, 2021, 09:25:28 AM »
Are these typical values of housing and rent in the area?  $750 per month seems like a lot for a $40,000 house.  How much would the monthly payment for mortgage, insurance, and taxes be on it?
If you really want to run it like a business you would request:
1. Minimum credit score check
2. Maximum 30% Rent-to-income ratio
3. Previous landlord references

This is to make sure the rent is affordable to your tenant (#2), that they put priority on bills (#1), and that they'll take care of the place (#3).

Here is how these stack up:
1.  brother-in-law is bad with his finances
2.  $1200 net, so maybe $1440 gross?  Maybe 50% Rent-to-income ratio
3.  Sounds like he's getting kicked out by his landlord not allowing a lease renewal, plus the point of this is to see if he takes care of the property, which you've already said is a 'no'

I know you aren't trying to make money off this, you're FIRE already anyway.  But could you justify taking over his finances, and having more than half his income spent on a property you own?  Tying up so much of his income on housing it's no wonder he can't keep up with his finances.

I don't really have a problem with the smoking.  I've always had a no-smoking-in-the-house clause because of insurance, but my experience is new carpet, throwing away the drapes, and painting the house gets rid of all the smoking smells.


Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #6 on: May 06, 2021, 09:35:13 AM »
Oof.

The pitfalls that you aren't seeing are enormous.

That said, that doesn't mean it's a bad plan, just that you definitely aren't seeing the real reasons why it might make you fucking miserable, be wildly unhealthy, and welcome a cluster of fuck of conflict into your marriage, since I'm assuming this is a spouse's sibling?

First, let me just say that I hear you.
I tried to do the exact same thing for a disabled family member. The plan was very good on paper, it made perfect sense, and the family member was 100% on board and I trusted them completely.

It was an easy, simple, elegant arrangement that I was totally comfortable losing money on, I was fine if they had to stop paying rent for whatever reason.

I thought I had thought of everything.

Yeah...ask me how that went, see which eye starts twitching.

ChpBstrd

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #7 on: May 06, 2021, 10:57:44 AM »
Ugh. Reminds me of a relative we recently lost to alcoholism and chain smoking.

If you buy a 40k house for him, itís a gift. Just accept that. Thereís no business to it. You donít even want to own it because then code enforcement comes after you and you have to pay the taxes.

If $40k plus transaction costs is a bit much to spend on charity at the moment, consider a worn-out RV from the 1980s or 90s, and a cheap, tiny plot of land with utilities, depending on local costs. You own the land, gift the old RV to him, and pay taxes on the land as a long term investment. Someday - perhaps decades from now - he will be gone one way or another and youíll have a bunch of trash to clean up before selling the land.

A better option would be to help him find someone with similar characteristics who needs a roommate.

six-car-habit

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #8 on: May 06, 2021, 11:37:39 AM »
 Sounds like the lack of cleaning is more from lazy habits / lower standards, than you keep for yourself.  From the description it seems like the disability is not a severly limiting physical factor preventing him from keeping a presumably small rental, clean +/or uncluttered in the past. He has 24 hrs a day to devote to his own pursuits - minus the doctor visits [?]

  If you do follow this thru, i'd make sure the small house / mobile home / RV  is Not on a rented lot , like a mobile home park.  Keep the # of payouts that need to be made to a minimum, taxes and utilities only, no rental propane tanks or similar.  If he would grant a power-of -attorney for his "bills" that you controlled, out of his SS benefits direct deposited account, that income money would only go as far as it had a positive balance. What stops him from getting to the bank on the day of $$ infusion, and pulling it out, before you pay the electric bill ?

 Can you look at this as ....  instead of getting your spouse a 2 yr old Lexus for $ 40K, or taking a few trips across the Earth for a similar cost ,  having a kitchen remodel in your own home, etc  -- that you are willing to help him find a $ 40 K home on its own plot of land -- review the relevant paperwork youselves, or have an attorney or title firm review the contract if it is a private owner sale [ not MLS listed or represented by a RE agency ].  Then bring along the purchase price to closing / deposit it into an escrow account with title company -- and the house just goes into his name only,with zero mortgage owed, and you are not attached legally,  except for vouching that you gifted him the money.

 Then if he wants to have you control the payments to the county for taxes, and the power provider, great!  - and if he doesn't want to sign over that autonomy on what day bills + taxes get paid + how much -- well you made an attempt and he'll have to deal with it himself , at his own peril, not yours.
 
 Also -this way when you go visit , the probable future mess will not bother you as much.

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #9 on: May 06, 2021, 12:39:17 PM »
Sounds like the lack of cleaning is more from lazy habits / lower standards, than you keep for yourself.  From the description it seems like the disability is not a severly limiting physical factor preventing him from keeping a presumably small rental, clean +/or uncluttered in the past. He has 24 hrs a day to devote to his own pursuits - minus the doctor visits [?]

  If you do follow this thru, i'd make sure the small house / mobile home / RV  is Not on a rented lot , like a mobile home park.  Keep the # of payouts that need to be made to a minimum, taxes and utilities only, no rental propane tanks or similar.  If he would grant a power-of -attorney for his "bills" that you controlled, out of his SS benefits direct deposited account, that income money would only go as far as it had a positive balance. What stops him from getting to the bank on the day of $$ infusion, and pulling it out, before you pay the electric bill ?

 Can you look at this as ....  instead of getting your spouse a 2 yr old Lexus for $ 40K, or taking a few trips across the Earth for a similar cost ,  having a kitchen remodel in your own home, etc  -- that you are willing to help him find a $ 40 K home on its own plot of land -- review the relevant paperwork youselves, or have an attorney or title firm review the contract if it is a private owner sale [ not MLS listed or represented by a RE agency ].  Then bring along the purchase price to closing / deposit it into an escrow account with title company -- and the house just goes into his name only,with zero mortgage owed, and you are not attached legally,  except for vouching that you gifted him the money.

 Then if he wants to have you control the payments to the county for taxes, and the power provider, great!  - and if he doesn't want to sign over that autonomy on what day bills + taxes get paid + how much -- well you made an attempt and he'll have to deal with it himself , at his own peril, not yours.
 
 Also -this way when you go visit , the probable future mess will not bother you as much.

Even this betrays that most people don't understand the pitfalls of providing housing for family.

As I said in my post, I was perfectly willing to have my contribution end up charity in the end.

It still caused an entire year of daily stress and put strain on my marriage, and it falling through was the best thing that could have ever happened to me.

The pitfalls come with trying to take responsibility for another adult persons living situation when that person is not a legal dependent.

There are invisible and unspoken relationship dynamics between everyone. We're rarely even conscious of them, but most relationships stay functional because we've all been pretty well programmed to stay in our lanes with respect to one another.

Buying a brother in law a house trounces all over those social norms, and violates all sorts of unspoken boundaries. This means that for everyone involved, the standard for communication and respect is much, much higher, because even the most casual of conversations are now at risk of causing feelings of disrespect and unmet needs.

It's not the practicalities that are the pitfalls, it's the interpersonal dynamics that are the risk. So you can cover your ass on the financial side down to the worst possible outcome, but it's impossible to predict the interpersonal fallout, because that's what happens when you don't play within the bounds of established, healthy interpersonal dynamics.

Fuck with the healthy order of human relationships and you risk serious consequences, no matter how careful you are.

OP: how would it make you feel if you offered to do this, and your brother in law was enormously grateful and said all the right things. Then when it came to looking for houses, he started being really picky about what you buy, started saying things like "of course I'm grateful, but this is my house, my life, I should get a say about where I live" when you start suggesting places to buy and he whines that they don't have a specific, not important feature that his current place has.

Would you be offended? Frustrated? Would you complain to your spouse that it doesn't make sense for him to complain because you are offering him something so much nicer than his current home, which he can't even afford?

I'm not saying that this is what will happen, I'm saying this is what CAN happen, very easily.

And what are the chances that you and your spouse are on the *exact same page* as to what is a step too far? What happens if one of you is pissed off and ready to bail on the whole thing and the other isn't?

What happens if you insist on calling it off because you've just been pushed too far, and your spouse grudgingly agrees, and then BIL gets evicted and is homeless? How does THAT get resolved? What does that do to your marriage?

Again, this is all just off the top of my head.
But all of this is not just possible, it's probable when you do things like this. Some version of what I described is LIKELY to happen.

And it's WAY MORE stressful than losing 40K.

YttriumNitrate

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #10 on: May 06, 2021, 12:44:35 PM »
I would love for him to be able to own a house but heís just not able to manage things like cleaning and maintenance himself. He just doesnít do it. Heís not a bad guy, just not very good at being an adult.
We are FIREd and have lots of cash to deploy quickly if needed. We are thinking about buying a house for him to live in. It looks like we can get a decent enough house around here for about $40k.

If you decide to give him a $40k house, be sure to factor in that going forward you'll need to give him a thousand or two per year on maintenance to keep the house from falling apart.

Louisville

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #11 on: May 06, 2021, 01:22:12 PM »
Just pay his rent somewhere.

SunnyDays

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #12 on: May 06, 2021, 03:46:58 PM »
As Iíve said before:  No good deed goes unpunished.  Did BIL ask you for help or are you jumping in because you think he needs it?  You havenít said what the nature of his disability is, physical or otherwise (or both) or his age (canít be that old if you think he could still live decades).  All of these variables should factor in to your decision, but honestly, it sounds like a recipe for everyone to hate each other in short order.  Your best bet would be to set him up with a disability association that can help him.  They would have the experience and necessary contacts to help difficult to house people.  And if one doesnít exist in your small town, then maybe he has to move.

six-car-habit

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #13 on: May 07, 2021, 01:50:11 AM »
   Malcat - did you supply a rental house for your relative for a period of time, or buy them a small home - or did either fall thru before major $$ outlay occured ? It is kind of hard to tell from your answer, but seems the transaction didn't get very far. 

 When you mention that you had an elegant arrangement that you were ok losing money on, and believed you had it all covered - alot of "i" statements were used.
      Is part of the implication of your last post,  that social norms being trounced and healthy order of relationships being corrupted, became a wedge between you and your partner... ?   Meaning you both were not as on-board with the plan and potential pitfalls, as you were alone ?

Villanelle

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #14 on: May 07, 2021, 08:33:31 AM »
   Malcat - did you supply a rental house for your relative for a period of time, or buy them a small home - or did either fall thru before major $$ outlay occured ? It is kind of hard to tell from your answer, but seems the transaction didn't get very far. 

 When you mention that you had an elegant arrangement that you were ok losing money on, and believed you had it all covered - alot of "i" statements were used.
      Is part of the implication of your last post,  that social norms being trounced and healthy order of relationships being corrupted, became a wedge between you and your partner... ?   Meaning you both were not as on-board with the plan and potential pitfalls, as you were alone ?

I won't speak for Malcat, but I'll tell you what I have seen happen.  Everyone is okay with losing money, so they think they are okay.  They look at the worst that can happen--Recipient (R) doens't pay what is agreed and totally trashes the place, perhaps--and decided they can accept that, so they see no real downside to doing it.

When they are shopping, R is adamant that he needs at least two bedrooms, even though he lives alone.  And he states that he just *can't* live in the home with only one window a/c, and he really needs a garage.  This annoys the Gs, but they are able to find something that meets R's list of "needs" within their budget, though they could have saved $10,000 by getting home the nice one bedroom with a/c unit.  So begins our experiement.

Then R only pays half the agreed upon amount one month and also posts on FB about his weekend trip with friends that clearly costs at least $200 in gas and hotels.  Giver 1 think they need to say something to him so that R can start making better financial choices.  G2 thinks that paternalistic and nosy, and that R deserves a modest, fairly frugal trip after the shit year he's had.  Two months later, it is no rent at all and a new TV.  G1 and G2 disagree on how to approach him.  Then the Gs get a note in the mail from the city about the code violations becase R isn't caring for the lawn at all and has parked a broken car on it.  R2 decided to be the one to speak to him, and does, telling G1 that R understands the urgency and is going to address the issues ASAP.  Two months later, another note from the city, this time with a fine.  Nothing has been done.  And during those 2 months, R hasn't paid rent.  G1 is now ready to call the experiment a failure and to tell R he needs to move out.  G2 doesn't necessarily disagree, but the family pressure is intense and G2 fear (knows, really) that her family will think she is terrible for kicking out a family member when she can afford not to.  Perhaps 1 and 2 had even agreed in advance that if R ever got $XXXX in arrears, they would boot him, but actually DOING that is much harder.  And now R makes a payment of the next's month rent plus a few hundred toward the back balance, so he's not actually $xxxx in arrears any more. 

There is a family picnic.  Someone mentions how nice it is for the Gs to have helped R.  R is embarrassed and it makes a very awkward moment.  Meanwhile, R1 and even kind of R2 are seething a bit because R is being a terribly ungrateful recipient and not meeting his end of the agreement (and not due to job loss or major illness; just because he can) and R has put a great amount of daily stress on them.  They spent last night arranging and paying for someone to come do an expensive overhaul of the yard and trying to get the car towed, but they can't do the later because the car isn't in their name so no one will agree to haul it away. 

It's a mess.  They were okay with losing the money, but that's not quite what happened.  They thought it was a worst case scenario, but they were looking only at money, not at fractured family relationships and blatant disrespect and stress in their own relationship. 

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #15 on: May 07, 2021, 08:51:39 AM »
   Malcat - did you supply a rental house for your relative for a period of time, or buy them a small home - or did either fall thru before major $$ outlay occured ? It is kind of hard to tell from your answer, but seems the transaction didn't get very far. 

 When you mention that you had an elegant arrangement that you were ok losing money on, and believed you had it all covered - alot of "i" statements were used.
      Is part of the implication of your last post,  that social norms being trounced and healthy order of relationships being corrupted, became a wedge between you and your partner... ?   Meaning you both were not as on-board with the plan and potential pitfalls, as you were alone ?

I often use "I" and "we" interchangeably. DH and I were 100% aligned every step of the way. We never do anything without being fully on the same page.

We got very far, we owned two houses for 5 months, we lost tens of thousands. What's worse is that we ended up selling the property with more earning potential, it would have made us a ton of money had we held on to it, but we didn't have the capacity to be landlords to anyone other than family at the time.

The details of my situation aren't that important to the point I'm making. And we aren't even bothered about the money we lost.

The process was a stress in our marriage, but never a wedge. It messes with our normal state of harmony for sure, it was a lot of pressure. And the relationship between inlaws has been permanently damaged. And that's hard because the one who is related to them directly can feel more naturally forgiving, and that can be hard on the other partner.

In the end, we're actually perfectly happy with how everything went down, even with the money we lost. Our case is weird because we ended up moving to the place we bought and selling our old, larger home, which was where the family members were supposed to live.

We're actually much, much happier in the new place, it's really our dream home, it's just not nearly as good an investment. But at the end of the day, we don't really care about the money. We would have never voluntarily given up that old house, which is appreciating rapidly since we sold, as I expect.

The young disabled couple who bought will benefit greatly from it. Yeah, that's another 10K we lost. We didn't take the highest bid, we sold to a couple I just fell in love with because I was showing the house myself. Their real estate agent cried when she found out what we did.

Also, my relatives were really fucked up by the experience. We didn't talk for a good long time, and things were tense when we did again. They had profound shame and frustration, and it was very difficult. However, they actually got their act together and started cleaning up their own shit and slowly over 18 months figured out how to be grown ups at the age of 65.

In the end, it all worked out very well for everyone *because* it all blew up and fell through. Everyone ended up with the housing they really want, including the wonderful disabled couple who now have a baby along with their rescue animals.

The only people who lost a lot of money were DH and I who could readily afford to. But we ended up in a much, much nicer home according to our standards, even though it's much cheaper. Most people have to spend more to upgrade, so that's just how we look at it. The cost of upgrading.

Really, everything is good, but ONLY because the plan failed.

And it was a miserable cluster fuck from hell to get here. Hence the eye twitching.

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #16 on: May 07, 2021, 09:10:34 AM »
   Malcat - did you supply a rental house for your relative for a period of time, or buy them a small home - or did either fall thru before major $$ outlay occured ? It is kind of hard to tell from your answer, but seems the transaction didn't get very far. 

 When you mention that you had an elegant arrangement that you were ok losing money on, and believed you had it all covered - alot of "i" statements were used.
      Is part of the implication of your last post,  that social norms being trounced and healthy order of relationships being corrupted, became a wedge between you and your partner... ?   Meaning you both were not as on-board with the plan and potential pitfalls, as you were alone ?

I won't speak for Malcat, but I'll tell you what I have seen happen.  Everyone is okay with losing money, so they think they are okay.  They look at the worst that can happen--Recipient (R) doens't pay what is agreed and totally trashes the place, perhaps--and decided they can accept that, so they see no real downside to doing it.

When they are shopping, R is adamant that he needs at least two bedrooms, even though he lives alone.  And he states that he just *can't* live in the home with only one window a/c, and he really needs a garage.  This annoys the Gs, but they are able to find something that meets R's list of "needs" within their budget, though they could have saved $10,000 by getting home the nice one bedroom with a/c unit.  So begins our experiement.

Then R only pays half the agreed upon amount one month and also posts on FB about his weekend trip with friends that clearly costs at least $200 in gas and hotels.  Giver 1 think they need to say something to him so that R can start making better financial choices.  G2 thinks that paternalistic and nosy, and that R deserves a modest, fairly frugal trip after the shit year he's had.  Two months later, it is no rent at all and a new TV.  G1 and G2 disagree on how to approach him.  Then the Gs get a note in the mail from the city about the code violations becase R isn't caring for the lawn at all and has parked a broken car on it.  R2 decided to be the one to speak to him, and does, telling G1 that R understands the urgency and is going to address the issues ASAP.  Two months later, another note from the city, this time with a fine.  Nothing has been done.  And during those 2 months, R hasn't paid rent.  G1 is now ready to call the experiment a failure and to tell R he needs to move out.  G2 doesn't necessarily disagree, but the family pressure is intense and G2 fear (knows, really) that her family will think she is terrible for kicking out a family member when she can afford not to.  Perhaps 1 and 2 had even agreed in advance that if R ever got $XXXX in arrears, they would boot him, but actually DOING that is much harder.  And now R makes a payment of the next's month rent plus a few hundred toward the back balance, so he's not actually $xxxx in arrears any more. 

There is a family picnic.  Someone mentions how nice it is for the Gs to have helped R.  R is embarrassed and it makes a very awkward moment.  Meanwhile, R1 and even kind of R2 are seething a bit because R is being a terribly ungrateful recipient and not meeting his end of the agreement (and not due to job loss or major illness; just because he can) and R has put a great amount of daily stress on them.  They spent last night arranging and paying for someone to come do an expensive overhaul of the yard and trying to get the car towed, but they can't do the later because the car isn't in their name so no one will agree to haul it away. 

It's a mess.  They were okay with losing the money, but that's not quite what happened.  They thought it was a worst case scenario, but they were looking only at money, not at fractured family relationships and blatant disrespect and stress in their own relationship.

Aaahhhhh!!! So true!!!!!

It's amazing how it can go from "we are so grateful, this is the most generous and amazing thing anyone has ever done for us, we'll be happy with anything"

To

-"Well, we at least need to be able to see mature trees from our bedroom window"
-"There's not enough green space for the dogs" Parks everywhere, huge dedicated dog park around the corner, but they were used to a yard
-"We REALLY like that building" That building having $800/mo in condo fees, but every other similar building somehow falling far short compared to "that" building, because "that" building has a pond
-"We know you're the one buying, but we'll be the ones paying your mortgage and getting nothing out of this"...other than rent control well below market value for life.

And you are so right. There is such a huge difference between being willing to lose money, and then having a loved one actually do the thing to you that causes you to lose money.

There's also a huge difference between agreeing on a point at which you cut your losses, but then there's the reality of ACTUALLY taking away a relative's place to live.

The unique combination of rage and guilt is impossible to navigate. Then your partner has a different flavour of the same rage and guilt, and you throw in family dynamics and in law dynamics and it's just a cluster fuck of intense bad feelings and as I said, no prescribed boundaries to fall back on. So no one really knows what their lane is.

It's an amazing way to be made out to be the bad guy for being willing to lose money to help people you love.

Fucking mind blowing.

wenchsenior

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #17 on: May 07, 2021, 09:11:46 AM »
We did almost this exact thing for a parent ~10 years ago; she likewise lives only on $1000/month SS and had no assets (not even a car) when we bought a house for her.  Just like the OP's brother in law, she struggles mightily with basic adulting (mostly due to a pathologically passive personality and varying levels of depression) since her divorce in the late 1980s. We bought a second home, gave her an old car, and pay for most of the upkeep and most of the bills. 

This arrangement has worked out ok, but there are plenty of things to consider before doing it.  The only reason we took this dramatic a step was b/c she had been living in steadily worsening circumstances for 3 decades...burned through the divorce settlement, working only part-time with no benefits, decades without medical coverage or check ups which resulted in ever worsening health and eventually near death from a very treatable illness that left her partly disabled, driving uninsured b/c she couldn't make insurance payments, missing rent, etc.  Her financial life was just a slow spiral with no end in sight. If it were a situation where we had few emotional ties, I would have shrugged and thought, "it's her bed" but her situation led to extreme emotional distress for us and by extension the entire family, so deciding to support her was more for OUR emotional health than anything else.


Let me clarify: this was not a good option by any objective light, and it caused a huge amount of strain on us and our marriage and cost a TON of money for the first 3-4 years, but it was the least bad (emotionally speaking) of several very bad options.

There were several parameters to the situation that we set up that were dealbreakers, so I'd advise the OP to carefully consider what their particular dealbreakers might be before proceeding.  For example, she had to agree to be transparent with us about her finances, including letting us directly manage her money if that became necessary (it hasn't so far, and we are 10 years in). 

I'd likewise suggest that the OP set very realistic expectations for financial costs to this arrangement.  We did not charge rent at all.  Market value would have been about $700/month, leaving $300 to live on, which would have been extremely difficult (she spends about 100 on cigarettes alone).  So it was buy a house or pay for her rent and utilities.  Owning the house gave us more control, and prevented us dumping rent down a black hole.  We bought a house b/c we figured if she lived in it 10-15 years, we could at least break close to even (or only lose a little money) when selling it (even after putting about 35K of work into it).  And it gave us control and stability (no increasing rent, no changing landlords, no smoking or pet restrictions [she has cats]).

It affects family relationships as well, and that has been occasionally tough. I sometimes get extremely resentful that we have had to pour so much money into a person that should have been a functioning adult.  I sometimes get resentful that her other kids never have attempted to help, even though that's irrational b/c we made this decision on our own and thus took on the responsibility.  I  still have these feelings at times and have to work through them.

There is also the occasional problem of 'support creep' expectations.  Not from the parent herself, who remains grateful, but from other members of the family who sometimes make assumptions that we should alsoo pay for the parent's plane tickets for cross-country family visits, spend to take her with us on vacations, etc., on top of basic support.  This has made for some tense inter-familial dynamics at times.
...
ETA: As Malcat notes above, it's a strain on the marriage even if you are on the same page. I was outright miserable for the first 3-4 years after we did it, just b/c it was a big financial strain and juggling act for us; and a lot of the practical day to day was falling on me at the time. And I took on extra work to cover the added costs. And the relative lived with us for about a year while we were in transition (which was not a good scene...my husband and I had close to 20 years of 'just us in a small space' dynamic and adding a third person does not work well for us).  But things got easier once the initial huge costs of buying the house/doing some house repairs/moving the parent, etc were in the rear window.

Overall, it was the best decision FOR US of a number of very bad options, and certainly put the parent in a far more stable living situation than she'd been in for more than 20 years.  But it is NOT a decision I would take on lightly.

Good luck.
« Last Edit: May 07, 2021, 09:18:46 AM by wenchsenior »

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #18 on: May 07, 2021, 09:34:21 AM »
We did almost this exact thing for a parent ~10 years ago; she likewise lives only on $1000/month SS and had no assets (not even a car) when we bought a house for her.  Just like the OP's brother in law, she struggles mightily with basic adulting (mostly due to a pathologically passive personality and varying levels of depression) since her divorce in the late 1980s. We bought a second home, gave her an old car, and pay for most of the upkeep and most of the bills. 

This arrangement has worked out ok, but there are plenty of things to consider before doing it.  The only reason we took this dramatic a step was b/c she had been living in steadily worsening circumstances for 3 decades...burned through the divorce settlement, working only part-time with no benefits, decades without medical coverage or check ups which resulted in ever worsening health and eventually near death from a very treatable illness and left her partly disabled, driving uninsured b/c she couldn't make insurance payments, missing rent, etc.  Her financial life was just a slow spiral with no end in sight. If it were a situation where had few emotional ties, I would have shrugged and thought, "it's her bed" but her situation led to extreme emotional distress for us and by extension the entire family, so deciding to support her was more for OUR emotional health than anything else.


Let me clarify: this was not a good option by any objective light, and it caused a huge amount of strain on us and our marriage and cost a TON of money for the first 3-4 years, but it was the least bad (emotionally speaking) of several very bad options.

There were several parameters to the situation that we set up that were dealbreakers, so I'd advise the OP to carefully consider what their particular dealbreakers might be before proceeding.  For example, she had to agree to be transparent with us about her finances, including letting us directly manage her money if that became necessary (it hasn't so far, and we are 10 years in). 

I'd likewise suggest that the OP set very realistic expectations for financial costs to this arrangement.  We did not charge rent at all.  Market value would have been about $700/month, leaving $300 to live on, which would have been extremely difficult (she spends about 100 on cigarettes alone).  So it was buy a house or pay for her rent and utilities.  Owning the house gave us more control, and prevented us dumping rent down a black hole.  We bought a house b/c we figured if she lived in it 10-15 years, we could at least break close to even (or only lose a little money) when selling it (even after putting about 35K of work into it).  And it gave us control and stability (no increasing rent, no changing landlords, no smoking or pet restrictions [she has cats]).

It affects family relationships as well, and that has been occasionally tough. I sometimes get extremely resentful that we have had to pour so much money into a person that should have been a functioning adult.  I sometimes get resentful that her other kids never have attempted to help, even though that's irrational b/c we made this decision on our own and thus took on the responsibility.  I  still have these feelings at times and have to work through them.

There is also the occasional problem of 'support creep' expectations.  Not from the parent herself, who remains grateful, but from other members of the family who sometimes make assumptions that we should alsoo pay for the parent's plane tickets for cross-country family visits, spend to take her with us on vacations, etc., on top of basic support.  This has made for some tense inter-familial dynamics at times.
...
ETA: As Malcat notes above, it's a strain on the marriage even if you are on the same page. I was outright miserable for the first 3-4 years after we did it, just b/c it was a big financial strain and juggling act for us; and a lot of the practical day to day was falling on me at the time. And I took on extra work to cover the added costs. And the relative lived with us for about a year while we were in transition (which was not a good scene...my husband and I had close to 20 years of 'just us in a small space' dynamic and adding a third person does not work well for us).  But things got easier once the initial huge costs of buying the house/doing some house repairs/moving the parent, etc were in the rear window.

Overall, it was the best decision FOR US of a number of very bad options, and certainly put the parent in a far more stable living situation than she'd been in for more than 20 years.  But it is NOT a decision I would take on lightly.

Good luck.

Exactly.

This is a perfect example of stepping in and taking over as basically a parental figure in this person's life.

It's not normal or healthy to demand that a tenant be transparent about all of their finances, this violates so many boundaries. The only way this works is if all parties involved develop a totally new and robust set of boundaries where wenchsenior and spouse are operating in an authoritative role over this person's life.

That's a VERY different scenario than renting a relative a house and helping them out.

Wenchsenior took on a DEPENDENT. This person was obviously okay with occupying the role of dependent. Most adults can't and shouldn't. For the vast majority of adults, even if their life is a disaster, this is an unhealthy role for them to take on.

Never, ever, ever volunteer to infantalize a family member and make them into a dependent unless it's absolutely necessary. And even then, do it with extreme caution and awareness that it will be an enormous strain.

What NEVER works, is just partially treating the person like a dependent, so expecting them to be self sufficient, but expecting to also call the shots on some things, and having the delusional belief that YOU somehow get to be the one who decides which parts of persons life they are autonomous over and which parts they abdicate to you, just because you're putting up the money.

No matter what you do, there is no version of this where your life ends up better because you did it. There will be strain, there will be conflict, there will be unhealthy dynamics.

You may still evaluate it as worth it to do, just as wenchsenior has above, but go in with eyes wide open that there's no version of reality where this just goes well and feels good.

former player

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #19 on: May 07, 2021, 05:49:31 PM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #20 on: May 07, 2021, 06:00:00 PM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

I'm not sure anyone has said not to do it.

We've provided insight as to what to consider.

Sometimes all of the options are bad, but you need to know just how bad to each option is in order to decide.

In these situations, a lot of people like me assume that if they're okay losing the money, then they can handle the worst case scenario. A bunch of us are here to say: that's not the worst case scenario, it gets much, MUCH worse than that.

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #21 on: May 07, 2021, 07:07:45 PM »
Speaking for myself, I wonder how much BIL is contributing to his own problems and how much heís willing to help himself.  A lot of detail has been left out, but this is something I would take a close look at if I was the OP.  How much is canít versus wonít.  Disability and personality are two different things and focusing solely on the first can rapidly lead to problems with the second.

What would happen to him if the OP didnít have the ability to help?  Would he truly be on the street or would he somehow find his own solution?

six-car-habit

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #22 on: May 08, 2021, 11:08:43 AM »
Thanks Malcat, Villanelle, WenchSenior for your examples + further explanation.

 To FWP's point about - BIL will have to live with the fact that he's a guy who can't provide for himself - -  it seems like he's already there, since he's presumably on SS Disability for several years already.  I suppose he'd then have the stigma [?] of "economic outpatient care" being recieved from a Realtive as well as from the gov't.   Maybe he legitimately worked hard for many years and was hurt very badly on the job, hence the disability rating, but we don't know what BIL's malady is in this situation.

  When i hear a story about someone who is considered disabled, and the state is funding their lifestyle/ needs, but they are consistently spending $ on wants, like cigarettes -  I sort-of lose some sympathy for their situation.  I know addiction, and feelings of self worth, and boredom, and accompaning physical and mental pain associated with the disability are real.  Its just hard not to be cynical that some folks are "gaming the system" , at the expense of the rest of society, and those really in need.

 

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #23 on: May 08, 2021, 12:06:31 PM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

I'm not sure anyone has said not to do it.

We've provided insight as to what to consider.

Sometimes all of the options are bad, but you need to know just how bad to each option is in order to decide.

In these situations, a lot of people like me assume that if they're okay losing the money, then they can handle the worst case scenario. A bunch of us are here to say: that's not the worst case scenario, it gets much, MUCH worse than that.

Exactly.  Spot on.  Couldn't agree more. 

But you and I usually agree on these types of things, @Malcat .  Experience is a painful teacher, as they say. 

To @six-car-habit 's point: the key is "seems like".  He's in trouble, and he knows it.  But it's another thing to take straight handouts from someone.  I've seen it done numerous times, and it virtually always causes relationship problems, even when the grantee has no problem spending/losing the money.  It also creates entitlement problems: he thinks you're wealthy and will just cover him, so he may venture further into spending/wastefulness.  It's tough no matter how you slice it. 

And we're agreed on your last point.  It's frustrating, as it should be. 

To be fair, this is one of those situations where maybe all the options are bad.  Though things don't usually turn out as bad as they seem, I have found (as someone who has thought that they will).  I think the posters here are just strongly encouraging op to realllly "count the costs" of this decision, the biggest of which op will only pay in the future, and probably aren't financial (although there could be those too, especially with a gift house/landlord situation).   

Things usually don't turn out as bad as expected, EXCEPT for sticking your nose into the financial affairs of others.

That will almost always end up worse than expected.

Villanelle

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #24 on: May 08, 2021, 03:54:42 PM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

Offer to help BIL see what disability services are available to him.  Offer to help him find financial literacy courses.  Offer to help him with a budget.  Offer to assist him in selling some of his items so he can have extra cash.  Offer to help him find and use a food bank or other food assistance programs.  Offer to help him since up for SNAP if he qualifies.  Offer to help him find employment services and resume services (or to assist with creating his resume or filling out applications).  Offer to help him find a cheaper living situations.

Those are just some suggestions off the top of my head.  Note that all are offering assistance for  things that he would choose and do at least some of on his own.

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #25 on: May 08, 2021, 04:35:57 PM »
I see a downside beyond what everybody else already pointed out, which is the liability issue of being legally exposed to whatever is going on in that property.

I don't know your BIL's issues but here is a brainstorm of things I would be afraid of as the landlord of a known problem tenant

unpaid utility bills, especially basics of life such as heat, water, electricity which you might be obligated to cover

neighborhood nuisances such as if he has animals or vehicles improperly cared for

property damage (yours or neighbors) from pests or trash if he doesn't keep up with it

indoor damage such as hoarding that leads to ruined floors and walls, or mold, and liability risks like if a visitor trips and falls.

a house fire is always a risk in an unkept home with excess electrical appliances, congested dryer vents, extra electrical cords, or use of candles, plus you have extra risk from smoking. outdoor landscaping can also get out f control if not maintained and you would have to do it ourself or face the risk that you "should have known" the property was not safe. remember, a fire isn't only covered by your insurance it could also be bigger than your coverage limits if spread to another house and anybody is injured.

guests that won't leave, such as if he allows friends to stay so long they have tenants rights and cause their own damage or prevent your eventual sale of the place


again, i don't know what his individual issues are or why the current landlord is unwilling to renew. i am only brainstorming scenarios from the perspective of what could go wrong for you in the role of a landlord, above and beyond it being a poor financial investment
« Last Edit: May 08, 2021, 04:42:09 PM by cchrissyy »

Zamboni

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #26 on: May 08, 2021, 07:40:02 PM »
It's posts like these that keep me hesitant to offer help to relatives. I think that is probably a good thing. Let people manage their own lives as much as they can for as long as they can.

In terms of living situations, the one time I had a relative try to help another relative with a free home (in that case, offering to let them live in a large basement that had its own separate entrance, kitchen, and bathroom) it totally backfired. The gift recipient voiced complaint about the condition of things, giver got annoyed that recipient was looking a gift horse in the mouth, and there was a huge fallout that resulted in the home being sold and the original agreement being voided.

It takes a certain type of personality to accept a large, long-term gift like housing graciously with continued graciousness over time. It takes another type of personality to keep on giving long term, especially without strings attached (there are always, always mental strings of some sort). Most people just can't manage either side of it.

Also, I agree with others who noted that paying $750/month to rent a $40K home in a small town is ridiculous, and BIL will resent that it is so much of his income. It might be what he is paying now and it might be the fair market rent or "going rate," but he simply can't afford the going rate. The general guideline is that housing should be no more that 1/3 of take home pay . . . if you can provide housing for $400 a month, then that is more realistic in terms of giving him housing that he can actually afford, assuming that you decide this is something you actually want to do.

Metalcat

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #27 on: May 08, 2021, 09:14:31 PM »
Helping loved ones is great, getting inappropriately involved in the financial affairs of another independent adult is a different matter.

@seattleite have any of our very lengthy replies given you any thoughts, do you have any questions??
« Last Edit: May 08, 2021, 09:17:26 PM by Malcat »

jeninco

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #28 on: May 10, 2021, 02:19:40 PM »
I read the first few responses, then skipped to the end to say: we did this. We're still doing it. We're also still married, and I'd say it's going as well as reasonably possible.

My BIL was working in the trades in CA, renting a shared absolute shithole when the last recession rolled around. Rather than explaining to our then-tween-aged kids that their uncle died of exposure while we were taking fancy international tripss, we offered to house him. However, all parties agreed to several points:

- It's in our county, with decent medical and mental-health services. He moved out here.
- he agreed to pay rent when possible (he had a job for a while, but his physical and mental health have deteriorated and he's now getting SSDI)
- my husband and I agreed that BIL is a hoarder and was going to trash the place, and we have a deal that I never, ever, ever enter the house. I go up and help with landscaping/yardwork every month or two, and I've been in the garage a few times.
- we got a place that met his needs: 600 or so SF house, 900 or so SF garage. He had a roommate for a while (and passed through most of the rent to us), but doesn't now. We're OK with that.

Basically, we view this as us paying to keep him housed. He's got plenty of stuff going on, but when he's well he's reasonably pleasant and interesting to be around. And he's pretty good at just telling us when he's feeling antisocial, and we can respect that. We invite him for dinner not quite once/month, although it'll be more in the summer.  Our kids have been able to have a relationship with him that they never would've gotten to have otherwise (and he's a smart, interesting guy, who happens to have some physical and mental ailments.)

It's lovely that the house value has appreciated a LOT since we bought the place, but that was never the point (plus, when something happens to him we're going to have to pay for several haul-aways to get rid of all the crap)

So, I'd say it can work if everyone can have adult conversations about things. However, the OPs observation that their BIL doesn't "adult" well is note a hopeful sign.

shelivesthedream

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #29 on: May 14, 2021, 02:31:51 AM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

I think a much better solution would be to give BIL a budget, have him find a place to rent, then pay his rent directly to the private landlord. BIL is housed, but he retains a degree of autonomy and if he gets kicked out of where he lives for bad behaviour, it is by a neutral third party. OP has said they're OK losing money on this, and I think it would be more prudent to put a boundary around that and commit to losing whatever BIL's rent is every month than to risk him trashing both the house and their relationship.

I can see so many likely scenarios that would annoy the OP, from BIL not paying rent while spending equivalent money on ostentatious fripperies, to causing what the OP would perceive as unnecessary maintenance issues that they then have to take time and money to fix. I think it's better to outsource the landlord-tenant relationship and pay a fixed amount of money to do so.

former player

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #30 on: May 14, 2021, 05:08:04 AM »
OP's disabled brother in law is probably going to become homeless in a short period of time.  OP is early retired and comfortably off.  They all live in a small town where these facts are probably widely known.  There are probably limited or no social housing options available to the disabled brother in law.

What's your solution?  Have brother in law live with OP?  Become homeless?  Any other suggestions?

I think a much better solution would be to give BIL a budget, have him find a place to rent, then pay his rent directly to the private landlord. BIL is housed, but he retains a degree of autonomy and if he gets kicked out of where he lives for bad behaviour, it is by a neutral third party. OP has said they're OK losing money on this, and I think it would be more prudent to put a boundary around that and commit to losing whatever BIL's rent is every month than to risk him trashing both the house and their relationship.

I can see so many likely scenarios that would annoy the OP, from BIL not paying rent while spending equivalent money on ostentatious fripperies, to causing what the OP would perceive as unnecessary maintenance issues that they then have to take time and money to fix. I think it's better to outsource the landlord-tenant relationship and pay a fixed amount of money to do so.
That would certainly be more prudent, and if BIL can be helped into another rental that would be a better solution than buying.  But it seemed to me from OP's post that the problem is not necessarily the money but that no-one with a rental property in this small town will want to rent to BIL - he's being kicked out of his current rental, he's a smoker, he's on benefits, and there are "other problems" in his past, quite possibly ones that can't be hidden in a small town.  It's the fact that the rental market is probably closed to BIL that has led to the solution of buying a property for him, as the other options seem to be 1) BIL lives with OP, 2) BIL moves away to another town, or 3) BIL becomes homeless.

shelivesthedream

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Re: Bad idea to buy and manage house for disabled relative?
« Reply #31 on: May 14, 2021, 05:40:27 AM »
Perhaps I did not understand the full nuance of the first post. Still, I posit that money could solve the problem effectively without the enormous damage to the relationship that would ensue if the OP were to house the BIL directly. If the OP is willing to spend it. If it is a small town with private landlords, offering a higher deposit and acting as a guarantor, or paying above market rent, may act as adequate negotiation to make it worth the landlord's while.

The question then becomes how much money will make it an attractive proposition to a landlord, and how much money is the OP willing to spend. Personally I think that any option other than covering BIL's rent fully for a pre-budgeted amount is likely to end in difficulties - such as BIL not paying his portion and getting evicted. So the question is, can they afford to pay enough money to house BIL in a private rental? If not, is there anyone else who might chip in (who wouldn't cause their own problems)?

The only other scenario I can imagine possibly going well is buying a house and gifting it to BIL. Obviously it might get trashed but at least it's out of the OP's hands.