Author Topic: Raising rent on my Father and his new wife  (Read 6670 times)

Monk like

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Raising rent on my Father and his new wife
« on: January 27, 2015, 01:33:29 AM »
Hello,
I have come to a hard decision to ask for a rent increase on my elderly Father. He was and is the best Father I could have hoped for. Hardworking, loving, and always there for us kids. But, as life can deal some hard cards he was dealt many, and he fell upon very hard times through no fault of his own--life just blindsided him. He was in dire need of stable, safe housing, so I bough a house for him to live in with rent set at 50% below the going rental rate with the understanding I could use the home for myself and my wife and child if need be,and he could still live with us at a reduced rental rate. And I have been subsidizing his living costs for years now--and I know I am lucky to be able to help in that way although I am not rich by any measure. However, the time has come, as I am moving back to the U.S. for further study and work. However, he got married last year to a wonderful woman--we allll love her! He can no longer work as he was diagnosed with terminal brain cancer last year--but through a miracle he was treated and lived, and is CLEAR! Thank God.

His new wife has a stable retirement income  (greater than his which is only S.S.), and I have hinted (before his cancer diagnosis) that his marriage has changed the financial dynamic and the possibility of us moving into the house for a year or two. He has been resistant to talk about rent adjustments, so I have left the issue dormant until now and have made arrangements to move in with a sibling who has space, in an excellent neighborhood, schools etc. And we are going to pay the going rental rate for rooms which is close to my monthly costs for the house where my Father and stepmother live.

So, I sent an email outline of current costs, comparable rentals, and a suggested a monthly rent which is 30-35% below comparable rentals in the area. I know if they split the rent it would be no more than 30% of their basic retirement income for each, I am taking a hit, but, as I claim all rental as a"gift" it's tax free, and the proposed rent would cover my "fixed costs". I have not heard back, and made clear I do not want money to sour our relationship. But, I do have a wife and a child too. My other issure is that I promised the rent would never rise, and I "got your back"...but his marriage has changed things--in a good way, but in a complicated way too.

Just wondering what you guys would do in a similar situation? Am I wrong to ask for a rent increase? I am interested to hear other thoughts. Thank you, and best wishes.


marty998

  • Walrus Stache
  • *******
  • Posts: 6527
  • Location: Sydney, Oz
Re: Raising rent on my Father and his new wife
« Reply #1 on: January 27, 2015, 02:08:44 AM »
I think most parents in a Western culture would feel a pang of guilt leaning on their kids for cheap housing.

Eastern cultures can be different where there is an obligation on the kids to look after their ageing parents.

Calmly explain to him that you need to cover your costs and it's to help the grandkids. He'll come around if you are on good terms.

PEIslander

  • Stubble
  • **
  • Posts: 170
  • Age: 58
  • Location: Prince Edward Island, Canada
Re: Raising rent on my Father and his new wife
« Reply #2 on: January 27, 2015, 03:34:48 AM »
Unfortunately you are out of the country. It would have been far better to sit down face-to-face and discuss than to have sent the email.

Any chance your father and his bride could move in with your sibling and you + wife + child can move into the house you own? Maybe its time for your sibling to take his or her turn helping out your father.

innerscorecard

  • Pencil Stache
  • ****
  • Posts: 590
    • Inner Scorecard - Where financial independence, value investing and life meet
Re: Raising rent on my Father and his new wife
« Reply #3 on: January 27, 2015, 07:14:22 AM »
I could not imagine charging a family member rent, ever.

I think it would have been far better to just give the house to him, but to have bought a house you could afford to give away.

Aushin

  • Stubble
  • **
  • Posts: 123
Re: Raising rent on my Father and his new wife
« Reply #4 on: January 27, 2015, 07:25:42 AM »
^ See you say that, but I say "I could not imagine asking my son to subsidize my housing for me"

MishMash

  • Pencil Stache
  • ****
  • Posts: 647
Re: Raising rent on my Father and his new wife
« Reply #5 on: January 27, 2015, 07:27:21 AM »
It would be nice to say don't charge them rent, however reality is different if you can't afford that.  I'm not sure where the house is located or if there is enough space/money but what about building a guest cottage on the land (or better yet a pre fab that can simply be plopped down), they move into that, and your family moves into the main house.   You can then come to an agreement like they pay the utility bills for the property and foot part of the construction costs?

merula

  • Handlebar Stache
  • *****
  • Posts: 1290
Re: Raising rent on my Father and his new wife
« Reply #6 on: January 27, 2015, 08:51:01 AM »
Do you need the money? If not, I'd let it go. If you do, then I think you should explain why in terms of your own finances, rather than in terms of what you feel your father and step-mother should be able to afford. Yes, your calculations work out to 30% of their income, but maybe 30% is more than they can spend on housing given other demands, like medical bills.

You said "I won't raise the rent", not "I won't raise rent unless you get married or I feel your income warrants it." Between that and "He was and is the best Father I could have hoped for."/"I do not want money to sour our relationship.", I think you should drop it unless you really need the money.

caliq

  • Pencil Stache
  • ****
  • Posts: 675
Re: Raising rent on my Father and his new wife
« Reply #7 on: January 27, 2015, 08:55:34 AM »
Do you need the money? If not, I'd let it go. If you do, then I think you should explain why in terms of your own finances, rather than in terms of what you feel your father and step-mother should be able to afford. Yes, your calculations work out to 30% of their income, but maybe 30% is more than they can spend on housing given other demands, like medical bills.

You said "I won't raise the rent", not "I won't raise rent unless you get married or I feel your income warrants it." Between that and "He was and is the best Father I could have hoped for."/"I do not want money to sour our relationship.", I think you should drop it unless you really need the money.

+1

If you do need the money, I would try and sit down with both of them and look at their finances and your finances and mutually come to an agreement that works for both of you.

I know you said you told him you might move into the house if you came to the US -- is this no longer an option specifically because he got married?  Why not -- his wife doesn't want to live with you, you don't want to live with her, not enough room, or what? Who's driving the decision on not moving in to the house?

If it's you, and they're totally wiling to live together, then it's kind of on you to shoulder the burden of your choice not to follow the agreement you guys decided on.

If it's them, and they don't want you to move in, then it's kind of their fault for not sticking to the terms of the original agreement and they should be willing to look at ways to mitigate the damage that their choice will cause you. 

Indio

  • Bristles
  • ***
  • Posts: 338
Re: Raising rent on my Father and his new wife
« Reply #8 on: January 27, 2015, 09:03:34 AM »
Can your father move in with your sibling and you move into your house?
Can your sibling help subsidize your father's rent?
Your stepmother probably had to pay housing costs where she lived before she moved in with your father, maybe she would be willing to keep doing that?
Is your father getting disability pay that might increase is ability to pay rent?

Jags4186

  • Pencil Stache
  • ****
  • Posts: 596
Re: Raising rent on my Father and his new wife
« Reply #9 on: January 27, 2015, 09:22:01 AM »
You should have subsidized his rent elsewhere instead of letting him live on a property you own.  You're stuck now, IMO.

scrubbyfish

  • Guest
Re: Raising rent on my Father and his new wife
« Reply #10 on: January 27, 2015, 09:42:39 AM »
I was in a similar situation at one point and, in pre-MMM desperation, saw a financial counsellor who was firm with me: Your mum starts paying market rent, or you sell the house, period. Those were the only two options that could stop a financial leak and get my finances turned in the opposite direction. In my case, I literally could not afford to subsidize a parent's rent, much as I really wanted to.

Interestingly, over the next years my mum started heavily subsidizing homes for my brother and sister! When I had helped her and then reached a wall, neither parent wanted to help me, so I had to sell. But shortly after, my mum was forking over a good $20,000 year in subsidies to other siblings. It was a lesson to me in ensuring my own financial self-care.

I don't think it matters how you present it -email, mail, in person, phone- if you've reached a wall (whether financial, psychological, or other) it's good and wise and caring to let the other party know, and their response or lack of response says it all.

theonethatgotaway

  • Guest
Re: Raising rent on my Father and his new wife
« Reply #11 on: January 27, 2015, 10:23:28 AM »
If you can, based on everything you have said, I would give them the house in full and focus on other financial things/ earn more/ move on with life.

davef

  • Stubble
  • **
  • Posts: 221
  • Age: 37
  • Location: Wilsonville, OR
Re: Raising rent on my Father and his new wife
« Reply #12 on: January 27, 2015, 10:38:20 AM »
Wow, this is a hard one. Growing up my brother was a pothead, At age 19 (he was 21) He called me and said he wanted to move 200 miles away from the town we were raised in to live with me. I had two conditions. 1. No drugs 2. we split the rent 50/50, but Ill help you if you cant make your half. for the next 5 years we lived together, I can count the times he made full rent on one hand, but he held his word on the drugs and paid at least something every month. Luckily, me met a chemical engineer, got married, then went back to school and became one himself. Now they both have 6 figure incomes, though they have hundreds of thousands in student loans.

5 years ago my parents got a divorce, I have been giving my mom $500 a month ever since.

2 years ago my dad needed a place to stay. I let him stay at my house at about 25% below market rent (I would have done less but he makes 200k a year now).

I know how you feel, I feel like I have had to subsidize all 3 members of my immediate family to some extent. I agree with those that think this is a sit down conversation. When you get back, meet up with him, buy him a beer, (just the two of you) and talk it over, explain that you need the money to fund  your child's, (his grandchild's) college fund. Tell him if he gets to a point where he cant pay you will be flexible but this seems workable, get his thoughts and go from there.   

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Raising rent on my Father and his new wife
« Reply #13 on: January 27, 2015, 10:55:39 AM »
You haven't adequately explained why you can't move into the house (with him and his wife) as was initially agreed upon.  That would be the best option from my perspective.  (And if he doesn't like it, he can suggest alternatives to you.)

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Raising rent on my Father and his new wife
« Reply #14 on: January 27, 2015, 11:26:19 AM »
A couple of dynamics here:  You promised your father something (with the best of intentions, but probably not wise).  Now you are in a way revoking your promise (at least its details), based primarily on his new marriage.  How would that make you feel if you were him?  I feel for you, but try and understand how he and his new bride must feel.

Secondly, you sent an email...????  Yikes!  He's your father!!  Talk on the phone or skype.

Ok, given that, I would tell them you are taking over the entire house, then help them move somewhere else.  If you want to continue to help them, give them some money toward rent.  Boundaries.  Good luck for a tough situation.   

rmendpara

  • Pencil Stache
  • ****
  • Posts: 602
Re: Raising rent on my Father and his new wife
« Reply #15 on: January 27, 2015, 11:38:43 AM »
Not a great decision in hindsight, but you had the best intentions.

Now that things are more complicated, perhaps just sell the house (with ample notice to father/mother). Many facts are missing, but if he's opposed to paying rent closer to market rate (after adjusting for the tax free "gift" nature), then consider selling the house.

In the future, I'd be alright with having my parents live with me for no rent plus whatever food and such, but it would be another thing to pay for their housing elsewhere.

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Raising rent on my Father and his new wife
« Reply #16 on: January 27, 2015, 12:31:21 PM »
One more thought - have you thought about the fact that this may come across to him as you not liking his new wife?  (I'm not saying that is actually the case, just that I can see him getting that perception based on your action of reneging on your promises to raise rent via email right after he remarries.)

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Raising rent on my Father and his new wife
« Reply #17 on: January 27, 2015, 01:07:30 PM »
Oh yes, I love that idea:  SELL the house!  Even better.

Prairie Stash

  • Handlebar Stache
  • *****
  • Posts: 1809
Re: Raising rent on my Father and his new wife
« Reply #18 on: January 27, 2015, 02:23:11 PM »
If my parents move in I'm going to charge them 2 ways. First is the regular rent, it'll be low. The second part will be deferred payment; I'll charge an amount/month to their estate. After they both pass on I'll put a claim against their estate for monies owed. If the estate is insufficient I'll eat the loss. The idea is I'll charge an overall fair rent (probably on the low end to avoid controversy), without undue hardship on them while they're with me. Pretty much I'll defer retirement savings until later and then have it partially caught up. I took the idea from cities where they'll defer taxes or reverse mortgages. Same idea with a lot more compassion; I'll gladly go in the hole if they live a long time. It's an idea I'm still fleshing out in my head, obviously I'll get input first.

Knowing myself I'll be annoyed if I had subsidized them $50K and my sister and brother get their estate. I don't have much hope it'll be an equitable distribution, its not my choice to make. I'll let everyone involved know the details, if anyone objects they can object early on or hold their peace.

Sofa King

  • Bristles
  • ***
  • Posts: 381
Re: Raising rent on my Father and his new wife
« Reply #19 on: January 27, 2015, 02:48:07 PM »
Oh yes, I love that idea:  SELL the house!  Even better.


I concur.