So, yeah . . . we're going to try multi-generational living.
We live in a townhouse suburb of Fort Worth and my parents live further out on what was once a mini-ranch and now is a couple of acres of woodland and a house. I currently live a mile away from work (as does my wife). In this new house we'd be about ten miles away, but my wife and I would carpool.
Mainly my parents are asking that we take their house, and they'd build a mother-in-law suite in the garage. Especially now that they're older and didn't take good care of themselves (Father is 72, has emphasima and was recently diagnosed with stage three chronic kidney disease, all from 55 years of smoking a pack a day). Mother is 67, diabetic, HBP, family history of Alzheimer.
We've always offered to take care of them when they got older as long as we viability could, and so that is one part of this opportunity.
The idea is we'd sale our house, I expect about $50,000 profit after taxes, fees, etc. on the low end. The garage is 859 sq feet, so assuming $100 per square foot for construction (I don't know how accurate that is)., we'd use a HELOC for the remaining $36,000 at about 4.8% for 20-30 years from our credit union. (We also may, get a larger credit line, then sell the house, and then payback part of the HELOC with that). Their mortgage payment has 12 years left and we'd pay half of that to my parents directly, along with half of the home insurance, and property taxes. One advantage of Texas is that property taxes will be locked in while it is in their name.
Four stipulations we made to my parents is that: 1.) house and property decisions would ultimately fall on us. My wife and I are in our thirties and want it to feel like it is our own place. That does not mean they don't get a say, but that we are partners. 2.) Except for shared laundry facilities, we do not enter the other's abode without permission. 3.) My sister would have the current value of the house minus any contributions I make reembursed upon my parents' death either from inheritance, life insurance, or if necessary, we will make up the payment. Also clear title will pass of the house to my wife and me upon their death, and that my sister understands this beforehand and is okay with it. Ruined family relationships is not worth it imho. 4.) We need to give the property some kick ass estate name.
Advantages:
Lower housing costs - from about $1300 for us to about $450-625, and half of what they pay.
We love the house and the property and wanted something with a more rural feeling.
The outdoors. In addition, with more to do on the property it'll be harder to justify "fun spending" because we're bored. Our kids (9,5,2) hardly watch t.v. but are always outside playing sports or in the yard.
Being able to take care of parents and also helping them with their last wishes.
They've offered to babysit and do daycare.
We're all on board with ideas and are being clear on our expectations.
Better public schools
Neutral
Energy Costs and Insurance - It should be lower if we can bundle auto, and energy costs will be halved, but will also have to light up 800 new square feet. It's well water. We'll call it neutral.
No biking to work, but we can carpool. To me the time is important.
Size - Our house is 3/2/2 and 1750 square feet. This house is 3/2/2 and 2300 square feet. So, we do want another bedroom, but with more square footage, we should feel less cramped.
Negative
It's an older home. Most of it has been renovated, but it's an older home . . .
I hate moving.
Four grown adults on the same land with strong personalities.
If for some reason we need to move far (my wife and I are in education, but it could happen), we lost some of that flexibility and immediate equity.
The financial risk of going HGTV crazy with new property.
Although, it can be nice to spend parents' final years, it is also a lot more prominent. Also, we would be caretakers of them.
My sister.
So, what are your thoughts? Suggestions? Also, any recommendations on converting a garage into a suite?
I'm interested in hearing it either way.