Hey all,
I've posted here and there about my in-laws and how terrible they are managing money and decision-making. They have a house they took a 30yr loan out on back in 2004 (it's a 3bed 2bath home, and the current value is maybe only $40k more than what they originally bought it for in '04 - it was originally priced at $525k back then and is around $565k now), and they have about $250k in principal left on it. Today, my wife and I discussed with my parents the potential option of having them move into the place we're currently in (owned by my parents) where we pay $700 a month for (it's a great bargain for us). After further discussion, my parents came to the conclusion that they would want to ask for $1500 rent (which is still well-below market rental pricing) from my in-laws if we wanted to do this. As it is, they collect somewhere in the ballpark of $2000 for social security. I don't think that number goes up either once they stop working and 'retire' (they own/run a restaurant business). On a sidenote: she thinks that they won't be able to sell the restaurant because they are in a month-to-month lease with the landlord and that it is highly unlikely that someone will take over the business without a lease contract in place. That said, it seems they may will walk away from it at a loss. At best, they could try to liquidate the restaurant equipment and furnishings but they probably wouldn't get much back for it either way.
Once they have walked away, they'll have no other source of income other than the money they receive from renting out two of the other rooms in their home to single-tenants and social security. My wife has a heavy-burden on her heart to help her parents out at least with a decent living arrangement that is closer to us if possible. Since my parents aren't willing to involve themselves (despite being given the impression that they might in earlier conversations) at this point, we have to rule the option out that my in-laws could viably move into our place (and that we would have to find another place). Plus, it seems like it wouldn't benefit them OR us (as we have been able to save quite a bit with 'rent' that low)... not to mention, if they moved into our place, it is assumed that we would have found another place and whether we're renting or will have bought, it will definitely be more expensive regardless.
So the following thought came to mind.... what if we helped them pay off the remainder of their mortgage OR help with mortgage payments? That way they could just keep living where they are comfortably without having to make changes. Basically, we would co-own the property with them and then I suppose the other half of it would be our future 'inheritance'. The only difficult part of this would be that they live an hour away from us (Orange County) in Chatsworth (San Fernando Valley in SoCal). With nothing better to do, they'd probably find themselves constantly driving down to visit us to see their grandson and soon-to-be granddaughter. Then we could just figure out how to split the rent money from the tenants they rent to so that they have 'enough' for themselves (in addition to social security). OR we could potentially have them still move closer to us in housing that's as affordable as can be found in our immediate area, and rent out the Chatsworth house completely.
If nothing changes and they just walk away from the restaurant, I suppose they could just keep living at the current place as long as they continue renting out rooms to those tenants, but that seems a bit risky given that the tenants are pretty much free to leave when they want (I'm pretty sure they don't make them sign any sort of contract on length of stay or whatever - it's a very informal rental arrangement).
Cost of living up there is definitely lower than in Orange County but not by a ton. We certainly have the capital to help pay off the mortgage and the home is in pretty good condition overall. Given my current work situation with 100% telecommute, we could move up closer to them or even into their place (though, we'd then have to find affordable housing for them, which I don't think would be as hard as in our current area) if we wanted or needed to as our family grows. But I really like living in Orange County in addition to the arrangement we have with my parents as far as low-rent is concerned. With another kid on the way though, space will be getting tighter in our condo but it should be manageable. If we decided to have 3 or even 4 kids in the long run though, it would be getting really tight in there. Of course, I don't know if the 'solution' is as simple as moving into the Chatsworth house. This part is all rabbit-hole digression and speculation anyway...
Any suggestions or thoughts?