Author Topic: Buying a home for in laws  (Read 5859 times)

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Buying a home for in laws
« on: September 12, 2013, 07:48:20 PM »
Depending on how one set of parents' next few months go, we may see them facing a housing crisis. At that point, my husband and I are the family members with the means to step in and help. We'd want to do that, but we're starting to talk over a couple of options.

One is to buy a newer trailer than the one we moved out of in the spring (it's falling down and is unsafe) and have that pulled in to our land, using the existing water, septic, and power hookups. The current trailer would have to be removed, and that's probably going to mean a tear down. It won't stay intact if it's towed. The removal is something we have to do eventually, anyway, but we wouldn't have to do it on any particular timetable absent the inlaws. At a guess, all this would cost $15-20K all in, and it would have the advantage of having them right here on the property if they begin to need care that we can provide. On the downside, we probably won't want to rent a trailer on our property to someone else when the inevitable time comes, so it would all be sunk cost, and later we'd remove that trailer, too.

The other option is to buy a house in town for them. "Town" is about eight miles away, and while houses there can be had for $10K, we'd be looking at $25-35K for one I'd be willing to move elderly relatives into. The upside is that someday it could be a rental; we'd been thinking of buying rentals in town anyway. The downside is increased cost and increased distance if they need us to be caregivers in a few years.

In either scenario, they would insist on paying some rent, and we'd charge something fairly nominal. But there would be something coming in to help offset expenses.

I'm leaving out the most emotional considerations here and trying to think through the logistics. Given that we would choose to help in this way if it's needed, which of the two options seems to be the best financial choice? Let's assume we would probably be able to rent out the house at a profit later on; that's the case now, though of course the future is unpredictable.

zinethstache

  • Pencil Stache
  • ****
  • Posts: 828
  • Location: Anywhere USA
  • FIREd 1/27/2017
    • My FIRE Hobby and travel blog
Re: Buying a home for in laws
« Reply #1 on: September 12, 2013, 09:30:00 PM »
Im just throwing this out there. Depending on how long they will be able to care for themselves you could turn this into a two step process. step 1. get a house in town. they live in it until they need more care. You can take your time getting the old trailer demo'ed. Step 2 can wait until they need more care. When that time comes, you put in a trailer and turn the town house into a rental:)

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Buying a home for in laws
« Reply #2 on: September 14, 2013, 10:33:48 AM »
I'm with Zinethstache. Excellent plan.

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #3 on: September 14, 2013, 08:33:05 PM »
I do like that idea; thanks! I knew I was being emotional. That's why I wanted other people's ideas on the financial side.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 11206
  • Age: 61
  • Location: NorCal
Re: Buying a home for in laws
« Reply #4 on: September 15, 2013, 01:21:26 PM »
Hate to chime in with a "me, too" comment, but Zinethstaches' suggestion is so good it deserves a +2. Great idea!

Also, Rural, my sister bought a foreclosure home on five acres. It had a modular on the property that had been completely trashed by the previous owners. IIRC, they got several unexpectedly high offers for the trailer frame once the modular was demo'ed. This was a silver lining for them and might be for you, too.

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: Buying a home for in laws
« Reply #5 on: September 15, 2013, 07:18:38 PM »
Where's the nearest hospital/emergency response? If that's in town, I'd be inclined to put the elderly relatives in town.

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #6 on: September 15, 2013, 07:44:59 PM »
Jack, good point. Not really a consideration for the hospital, but there is an EMS service in the county, and they'd be likelier to find a house in town than a trailer here. That's a good point.

The nearest hospital is right at forty miles from either one, north from our place to one, south from town to a different one, though the one to the north is up a long valley rather than over mountains, so it's probably more accessible from town, anyway. But it's either close to us or close to hospitals, and I don't think, at those distances, the difference is enough to matter.

Diane, we will likely get the frame to a metal recycler down the road if nothing else. Between that and the siding, we will recoup some of the cost. It would be great if someone would offer to buy the frame, even if it was for less than we'd get taking it in ourselves; the less time my husband has to spend with a blowtorch and hauling heavy slabs of metal around, the happier I am. I wish the thing would roll so we could tow it, but having looked under there, I'm thinking not. It's been sitting and rusting in that very spot for over forty years.

ritchie70

  • Bristles
  • ***
  • Posts: 268
Re: Buying a home for in laws
« Reply #7 on: September 15, 2013, 11:17:09 PM »
Not what you were asking, at all, but make sure you're 100% OK with this before you do it, because there's probably no going back once you do.

My wife and I bought a cheap condo ($70K - that is cheap here in the big city suburbs) for her mother to live in, and we pay the HOA and of course the loan on the condo.

That has caused tensions at various times ever since, which have escalated since we went from DINK (dual income no kids) to single income one kid.

Said "tension" including my telling the MIL to "go get F*ed". Not surprisingly, this was not well received by her.

She, and her grandson who lives with her, are messy people who are quickly trashing the place. If they were renters I would not renew their lease.

So just remember that any business-like relationship with family can get messy.

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #8 on: September 16, 2013, 07:20:37 PM »
Not what you were asking, at all, but make sure you're 100% OK with this before you do it, because there's probably no going back once you do.

My wife and I bought a cheap condo ($70K - that is cheap here in the big city suburbs) for her mother to live in, and we pay the HOA and of course the loan on the condo.

That has caused tensions at various times ever since, which have escalated since we went from DINK (dual income no kids) to single income one kid.

Said "tension" including my telling the MIL to "go get F*ed". Not surprisingly, this was not well received by her.

She, and her grandson who lives with her, are messy people who are quickly trashing the place. If they were renters I would not renew their lease.

So just remember that any business-like relationship with family can get messy.

Thanks, and you're right, but for us, the only business-like-ness would be accepting some nominal rent to make it more palatable for the inlaws. Any investment potential would be in the (hopefully distant) future only, unless we were to buy a duplex and rent out one side of it. That's an idea that I like for an investment, but I don't think I like it for their home. We may eventually end up buying two houses in town near each other. Then one could be a real rental and the inlaws could "help out" by keeping an eye on it. I guess what I'm saying is that if this happens, it will be something very close to "gift" level from our perspective, but they wouldn't just accept an outright gift. Not and live happily in their old age, anyway.

ritchie70

  • Bristles
  • ***
  • Posts: 268
Re: Buying a home for in laws
« Reply #9 on: September 19, 2013, 10:15:00 PM »
Not what you were asking, at all, but make sure you're 100% OK with this before you do it, because there's probably no going back once you do.

My wife and I bought a cheap condo ($70K - that is cheap here in the big city suburbs) for her mother to live in, and we pay the HOA and of course the loan on the condo.

That has caused tensions at various times ever since, which have escalated since we went from DINK (dual income no kids) to single income one kid.

Said "tension" including my telling the MIL to "go get F*ed". Not surprisingly, this was not well received by her.

She, and her grandson who lives with her, are messy people who are quickly trashing the place. If they were renters I would not renew their lease.

So just remember that any business-like relationship with family can get messy.

Thanks, and you're right, but for us, the only business-like-ness would be accepting some nominal rent to make it more palatable for the inlaws. Any investment potential would be in the (hopefully distant) future only, unless we were to buy a duplex and rent out one side of it. That's an idea that I like for an investment, but I don't think I like it for their home. We may eventually end up buying two houses in town near each other. Then one could be a real rental and the inlaws could "help out" by keeping an eye on it. I guess what I'm saying is that if this happens, it will be something very close to "gift" level from our perspective, but they wouldn't just accept an outright gift. Not and live happily in their old age, anyway.

There's really nothing business-like about our arrangement, yet it is a landlord/tenant relationship, much like you're proposing. We pay housing bills, she pays all other bills - but keep in mind that water, gas, and heat are all covered in the HOA, which we pay. In terms of recurring bills, she pays electric, phone, cable, internet, food and her auto expenses. But she acts like she's somehow doing us a favor (!) because we're winding up with an investment property. There's a reason she needs us to bail her out...

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #10 on: September 20, 2013, 09:53:50 AM »
Not what you were asking, at all, but make sure you're 100% OK with this before you do it, because there's probably no going back once you do.

My wife and I bought a cheap condo ($70K - that is cheap here in the big city suburbs) for her mother to live in, and we pay the HOA and of course the loan on the condo.

That has caused tensions at various times ever since, which have escalated since we went from DINK (dual income no kids) to single income one kid.

Said "tension" including my telling the MIL to "go get F*ed". Not surprisingly, this was not well received by her.

She, and her grandson who lives with her, are messy people who are quickly trashing the place. If they were renters I would not renew their lease.

So just remember that any business-like relationship with family can get messy.

Thanks, and you're right, but for us, the only business-like-ness would be accepting some nominal rent to make it more palatable for the inlaws. Any investment potential would be in the (hopefully distant) future only, unless we were to buy a duplex and rent out one side of it. That's an idea that I like for an investment, but I don't think I like it for their home. We may eventually end up buying two houses in town near each other. Then one could be a real rental and the inlaws could "help out" by keeping an eye on it. I guess what I'm saying is that if this happens, it will be something very close to "gift" level from our perspective, but they wouldn't just accept an outright gift. Not and live happily in their old age, anyway.

There's really nothing business-like about our arrangement, yet it is a landlord/tenant relationship, much like you're proposing. We pay housing bills, she pays all other bills - but keep in mind that water, gas, and heat are all covered in the HOA, which we pay. In terms of recurring bills, she pays electric, phone, cable, internet, food and her auto expenses. But she acts like she's somehow doing us a favor (!) because we're winding up with an investment property. There's a reason she needs us to bail her out...

Fair enough. There's nothing like an HOA here, and I'd think we would only pay the heat bill if they got cold, which we'd do regardless. I do know that tensions can come up, and frankly, I think that's an argument for "town" as opposed to putting them on the property where we live.

ritchie70

  • Bristles
  • ***
  • Posts: 268
Re: Buying a home for in laws
« Reply #11 on: September 20, 2013, 02:22:00 PM »
Fair enough. There's nothing like an HOA here, and I'd think we would only pay the heat bill if they got cold, which we'd do regardless. I do know that tensions can come up, and frankly, I think that's an argument for "town" as opposed to putting them on the property where we live.

We have a fairly large lot with a big back yard, and for a while toyed with building a guest house out back for her. So glad we didn't. Right now it takes about 8 minutes to get to her condo (but it somehow takes her 15 to get to our house, and she gets lost...) and that's a pretty good distance. Close enough that as she ages we can do more for her, far enough that she isn't likely to just stop by on her way somewhere.

Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
Re: Buying a home for in laws
« Reply #12 on: September 20, 2013, 02:31:12 PM »

An alternative to the trailer... (The house in town still might be better, but hear me out...) 

Could you put up a relatively inexpensive metal shop and build it out inside?  That might not have a 100% sunk cost in the long run.  When you were through with it as an in-law house, you could turn it into a shop/garage/outbuilding. 

I'm not sure how that compares to trailer prices... but I suspect it's in the same ballpark... and might be something you could still use long term.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4658
  • Age: 11
  • Location: USA
Re: Buying a home for in laws
« Reply #13 on: September 20, 2013, 02:35:57 PM »
Maybe I'm missing something obvious, but doesn't zinethstache's solution also mean that you end up with a trailer on your property when your relatives pass away, which you said you would rather avoid?

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #14 on: September 21, 2013, 05:53:19 AM »

An alternative to the trailer... (The house in town still might be better, but hear me out...) 

Could you put up a relatively inexpensive metal shop and build it out inside?  That might not have a 100% sunk cost in the long run.  When you were through with it as an in-law house, you could turn it into a shop/garage/outbuilding. 

I'm not sure how that compares to trailer prices... but I suspect it's in the same ballpark... and might be something you could still use long term.

I'd want to compare the prices. My gut reaction is a bit of "building fatigue," frankly, and there's no way my husband would consent to paying someone else to build it out (which would raise the price anyway). So that's a downside. Being able to get more use out of it sounds like an upside. If the need arises in a couple of years, I think this is a better possibility for us than right now, since at that point the house will be more finished (it's not finished enough for standard homeowners insurance quite yet, despite the building inspector's say-so, we've found out).

Another issue that my husband pointed out is the extreme slope of the site of the old trailer. I hadn't thought about it, but it would be very difficult for anyone with mobility problems to navigate. That may be the deciding factor for "town." My husband's school is on a hill just above town, so regular access is not such a problem, and there are several other family members there if emergencies come up, and old friends for them to socialize with... Town is starting to look like the best plan for several reasons.

Rural

  • Magnum Stache
  • ******
  • Posts: 4858
Re: Buying a home for in laws
« Reply #15 on: September 21, 2013, 05:57:56 AM »
Maybe I'm missing something obvious, but doesn't zinethstache's solution also mean that you end up with a trailer on your property when your relatives pass away, which you said you would rather avoid?

Well, it's not the trailer itself so much as the idea of renting to strangers there, but yes. I think we're leaning heavily toward a house in town. A little guest cabin there on our property where there's already a septic system would be no bad thing, someday, but I don't think a trailer is what we had in mind for that, and what we had in mind is too small for long-term housing, at least for conventionally minded folks.

Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
Re: Buying a home for in laws
« Reply #16 on: September 21, 2013, 06:12:31 PM »

I'd want to compare the prices. My gut reaction is a bit of "building fatigue," frankly, and there's no way my husband would consent to paying someone else to build it out (which would raise the price anyway).

I totally get that.  At some point you want to be "done" ... or at least you want a few months/years of feeling "done".