Buy my In-laws house?

[Millennialworkerbee]

Hi there! I'm a long time reader but first time poster. I'd really love to get some advice and perspective from the like-minded people on this forum. Here's my situation:

Hubby (30) and I (25) currently "rent" a house from my in-laws for $200 a month. It was my FILs mothers house, she recently passed away and left the house to my FIL. It's a 2 bedroom 2 bathroom 1100sq ft house and works perfectly for us and our 3 month old son. The "rental agreement"  was that we could stay there however long we wanted to, and leave when the house no longer suited us. It's awesome!

Here's the catch; it's about 500 feet from my In-laws house.

A few weeks ago they came to my hubby and I with a proposal; a house swap. We would buy their ~2200 sq ft, 4bd 2ba house from them for the remainder of their mortgage( I think about 100k- they renovated the house a few years ago and it is done really well)  and they would move into the house we currently live in. Their house is probably worth ~250k.

Pros:
- The best deal we could ever find on a house that will actually fit our family (we want to have 1-2 more kids)
- The in-laws could get out of their mortgage and be debt free, closer to retirement for them.

Cons:
- I live next to my ILs
- I don't feel like I could change anything to the house without offending my MIL
- If we ever wanted to move I think they would be offended

I've been slowly converting my husband to the frugal lifestyle; now I seem like the one who may be dragging their feet! He is all for this move because again, it is by far the cheapest we will ever be able to find a house. Plus our son would be raised in the same house/land he was.

I just feel like there would be an expectation that we see my ILs all the time. For the most part they are good about giving us space, but since they own the house/land there is always a chance that they will be right outside our house when we walk out the door to go somewhere.

Does anyone else have a similar experience? I know ultimately this is a personal decision but I'd love to hear some thoughts that could help me with some perspective.

Thanks in advance!

[Fishindude]

It really depends on your relationship with in laws.   Some people get along just fine in these circumstances, but I don't think I'd like being right next door to the in laws and having them privy to everything we do, etc.   Bare minimum, I'd have to have a privacy fence or wall of shrubbery for visual screening and some ground rules about dropping in unannounced.   If it was me, I'd say no thanks and stick with the bargain rent, while saving money for your own place.

If you get along great and elect to go with this deal, make sure you have the conversation up front letting them know you may choose to do some remodeling, and that at some point down the road circumstances may change and you might elect to sell and move.   See how they react to this conversation before moving ahead.

Good luck!

[slb59]

It sounds like you're already living next door to them. Has it been a nuisance so far? It also sounds like your MIL was in a similar situation living next to her MIL. I think your experience and their experience with his father's mother will be a good barometer for how living so close would go in the long term.

The other two cons you raised are probably worth talking through with them before you make any decisions. It's reasonable to expect someone to want to make a house their own, and also reasonable to see how someone might think it's perfect as-is.

Good luck!

[BlueHouse]

Sounds like they've already been extremely generous. I would also assume that they are still being extremely generous by offering you this choice. The alternative might be, "okay, we are moving into the smaller house and selling the bigger one either to you or a stranger." 
If you don't have a major problem with the in laws then go for it and find a way to be inclusive of everything, not exclusive. No privacy fence, no take the benefits without the drawbacks. Consider yourself one big family because odds are they will continue to do so much more for you than the other way around for 20 years while your kids are living at home. If you can open your heart to something like this, it will make you so much richer inside and out.

If you can't, then that's okay, but then you should move out to their home   

[acroy]

That is a super-sweet deal. I'd suggest Go for it, don't 'borrow' trouble. Get it in your name and be very clear and up-front about it; they sound reasonable. And if not... cross that bridge when you come to it!

[Millennialworkerbee]

Thanks for all the responses! I know they are offering us an incredible gift. The question is if I'm okay with being tied to my in-laws on a daily basis, for the long term. I agree that the only way to make it successful would be to treat the situation as one big happy family vs trying to separate lives. My in-laws tried that with my husbands grandma and it didn't go well at all. It's funny to me that even though living next to her MIl went terribly, my MIL desperately wants us to be close by (I know it's for the grandson way more than my husband or I).

[Watchmaker]

I wouldn't live in the same state as my in laws.  But I'd gladly live next to my parents.  And my SO would agree.

It depends on your relationship, which you know far more about than we do.  Given your hesitation, I think you should avoid this scenario. 

[BlueHouse]

Thanks for all the responses! I know they are offering us an incredible gift. The question is if I'm okay with being tied to my in-laws on a daily basis, for the long term. I agree that the only way to make it successful would be to treat the situation as one big happy family vs trying to separate lives. My in-laws tried that with my husbands grandma and it didn't go well at all. It's funny to me that even though living next to her MIl went terribly, my MIL desperately wants us to be close by (I know it's for the grandson way more than my husband or I).

oh what a great opening.  Why don't you sit down alone with your MIL and ask her what went wrong with her MIL and how can you guys make sure nothing like that happens?  She may say "well she was always in our shit, and if she had put up some boundaries, we would have gotten along fine", then it sounds like you've got the best opportunity to make sure you both know what you want.  If she says "well, that old lady wanted boundaries and I liked to be in her shit all day long", then you should run for the hills!  :)

[Pigeon]

I would only do it if they were open to establishing boundaries. The one big happy family thing would make me crazy.

[monkeytree]

Sounds like you're a bit stressed now even before making the decision - which means it could only get worse! :)  Sorry, this is coming from someone who respects their in-laws but would not want to live next door to them. Although you seem to already be doing that - do you enjoy your situation now?

Also, it sounds like if you don't agree to this house swap, they wouldn't be selling their house to strangers, they would just end up staying there, right? I agree they are being generous, but it's true that they would also be benefitting by not having a mortgage, so I wouldn't feel bad about turning down this "gift".

Or maybe you could just postpone the decision, telling them that you'd like to save up for a few more years before taking on the $100k mortgage. That way it buys you some time to 1) save $$ by only paying your $200 rent and 2) seeing how it goes living so close to your in-laws.

[BlueHouse]

Also, it sounds like if you don't agree to this house swap, they wouldn't be selling their house to strangers, they would just end up staying there, right? I agree they are being generous, but it's true that they would also be benefitting by not having a mortgage, so I wouldn't feel bad about turning down this "gift".

Or maybe you could just postpone the decision, telling them that you'd like to save up for a few more years before taking on the $100k mortgage. That way it buys you some time to 1) save $$ by only paying your $200 rent and 2) seeing how it goes living so close to your in-laws.

Why would they upend everything if they weren't looking for a way to bring a little more cushion to their own finances?  The way they can do it is to sell their house and downsize.  It looks as if they had a plan all along and now are offering right of first refusal to the kids. 

Just my take on it.  If the in-laws are being that generous just because they think you might like a bigger house, then you need to turn them down and explain why they need to take of themselves first (put the oxygen mask on yourself first). 

[jeromedawg]

This would definitely be a tough proposition for myself, whether with my in-laws or my own parents. I agree with the second poster in that in a case like this it really does depend on the relationship you have with your in-laws. Personally for myself, if I were in the same situation, I might end up reluctantly doing it if it were my in-laws? If it were my own parents, I'd only do it out of desperation though - they absolutely drive me crazy many times. Then again, if each party can learn to keep their own space, it might be OK. Ultimately, I think you'd probably get used to it. It seems like the benefits outweigh the cons here. But you really would need to establish and set some boundaries and expectations - if you can do that, reasonably, up front, then you'll probably be fine. The two big red flags are:

"- I don't feel like I could change anything to the house without offending my MIL
- If we ever wanted to move I think they would be offended"

If boundaries/expectations cannot be set around those things, then I'd say you may want to reconsider all this. Based on the phrasing though ("I don't think" and "I don't feel"), they sound like assumptions so it might be a good idea to bring those to the table with your in-laws and straight up ask them "for permission" for those things ahead of time.

[Capsu78]

My married kids live 10 and 15 minutes away already while my wife and I are now empty nesters in a home we have made just about right for us.  Recently the home across the street from one of them came up for sale, so we took a look to see if we could downsize and be there when the kids loaded onto and got off the bus, something we do a couple times a week anyway.
As the kids and families lived with us for a couple months while they waited for their short sale to complete, we sort of know each others "stuff" anyway- so we had the conversation with our daughter about if they would have a problem if we chose to move across the street.  In their early marriage, this would have been a "no way" but now they are in their 30's daughter just laughed and said "...being 10 minutes away doesn't seem to be much of a barrier to unannounced visits from dad anyway!" and they were all for it.

I would love to be in the arrangement OP has laid out because we all know our "get along" quotients, but ultimately we scotched the idea because part of the house downsizing meant living with the laundry room in the dark basement! It just doesn't compare with the sunny room with a view on the first we have now...it was a good exercise for my wife and I to begin to figure out what is non negotiable if/when we do downsize.

To the OP, IIWY, I would consider some sort of "probation period"  to test the proof of concept of one big Walton style family. It is mighty convenient to have willing grandparents available when raising multiple children.