helping in-laws rent out house of grandfather in-law who passed

[clarkfan1979]

My grandfather in-law passed in March 2017 and left behind his paid-off house and 3 other paid-off rentals to my in-laws who split it with one other sibling.

The grandfather requested that his children (two brothers) continue to keep the rentals and not sell. It's been 18 months and they are still less than 50% done cleaning out their fathers home. At the current pace, it's going to take 3-4 years to complete.

The house should rent for $2500-$2800/month. It's in a great location in the south Denver region. I'm guessing they currently pay $500/month for taxes, insurance and lawn maintenance, which they split with their other sibling.

Even though they have 4 paid off rentals, they are only collecting rent on two properties at the moment. It's a long story, but the point is that they don't have a huge influx of cash right now.

My mother-in-law has mentioned a few times that it would be nice to have the rental income. However, it wasn't her father who died. It was her father-in-law. I have offered to help, but they have not taken me up on it. Is there anything I can do to help? Does anyone have experience with this type of situation?

They have tons of equity across the 4 properties (about 2.5-3 million). However, they are not selling at the request of their father and they are currently struggling with cash flow.

[CNM]

They might be better off getting a property management company.  It'll cut into their rental income but the company can actually get those properties ready.  Doesn't sound like the family will ever get it done, not to mention do the routine work needed.

It's too bad that they feel like they can't sell as it sounds like the easiest solution.

[Frankies Girl]

Just because he didn't like the idea of selling, doesn't mean they have to obey his wishes. They absolutely should discuss it, as being a landlord isn't everyone's cup of tea and they should not be forced into dealing with renting/managing property out of some sense of misguided loyalty to a loved one's memory. It is just a house; it's not a shrine, and they need to do what is best for them.

That being said, you can offer to help them clean it out, they could hire a cleaning/organizing crew to do it for them (depending on where they are located, 800-Got-Junk is a packrat/hoarder group that will come out and remove and haul off stuff if the house is that level of filled up, otherwise they could get an auction house in to sell off the contents and/or ask family members to help them. But again, all you can do is offer your help/other options but they have to take you up on it. (I just assume it may be really junked up but I had to deal with a terrible hoarder house situation when my dad died, and it took around 2 years to get it cleaned out, fixed up and sold).

Their father's death might be hitting them particularly hard, and that's why it's taking them some time to work on the house and why they're not considering selling it right now. If it will take them years longer to even get the house cleaned out, I would likely wait til the 2 year mark and then offer to help again - cleaning out/organizing and remind them that GFIL may have wanted them to keep the property, but not at the cost of their own financials and well-being, so selling the property might be something to take another look at...

[waltworks]

He's dead. That's nice of them to consider his wishes here, but his wishes are a stupid idea in this situation. Sell the houses and split the money among the families in some fair way.

-W

[AMandM]

However, they are not selling at the request of their father and they are currently struggling with cash flow.

Do you know the reason behind your late grandfather-in-law's request? For instance, maybe he believed that having paid-off rental property was pretty much guaranteed income, and he wanted that security for his sons; maybe he believed that his sons would waste the cash if they sold. Whatever the reason was, there may be a way to achieve the same end through selling and putting the money to some other use. If they want to sell but feel guilty, it might be easier if they felt they were still fulfilling their father's goals for them.

On a different note, what do you mean by struggling with cash flow? Do the two rents at least cover the expenses of the four properties? If so, this sounds like a spending problem, not an income problem.

[clarkfan1979]

However, they are not selling at the request of their father and they are currently struggling with cash flow.

Do you know the reason behind your late grandfather-in-law's request? For instance, maybe he believed that having paid-off rental property was pretty much guaranteed income, and he wanted that security for his sons; maybe he believed that his sons would waste the cash if they sold. Whatever the reason was, there may be a way to achieve the same end through selling and putting the money to some other use. If they want to sell but feel guilty, it might be easier if they felt they were still fulfilling their father's goals for them.

On a different note, what do you mean by struggling with cash flow? Do the two rents at least cover the expenses of the four properties? If so, this sounds like a spending problem, not an income problem.

My father-in-law did have two rentals in the past, but I don't think he enjoyed it or was very good at it. He made money, but it wasn't worth the headache for him. The grand-father in-law liked the rental game much more. Maybe the grand-father-in-law considered it to be easy money.

I know the general idea of 3 properties, but have no idea about the 4th. There is also a 5th property that is land only. They pay taxes and someone to mow the lawn on the land. My best guess is that they are currently breaking even with everything. They claim they are selling the land to a developer, but they have been saying that for more than a year.

Selling does seem like a good idea, but they are not there yet. I'm just trying to help them clean out the house. They can't rent it or sell it until they remove all the personal belongings. They were there for 5 hours today. They came home with a waffle iron and a dutch oven.

I think waiting until the two year mark is a good idea. Would it be insensitive to suggest that they put the personal belongings in storage and then they can "take their time and not feel rushed" It would be an extra $150/month, but then could they could at least sell or rent it. They could even hire movers to do it. Maybe that would be less painful?

[AMandM]

Selling does seem like a good idea, but they are not there yet. I'm just trying to help them clean out the house. They can't rent it or sell it until they remove all the personal belongings. They were there for 5 hours today. They came home with a waffle iron and a dutch oven.

I think waiting until the two year mark is a good idea. Would it be insensitive to suggest that they put the personal belongings in storage and then they can "take their time and not feel rushed" It would be an extra $150/month, but then could they could at least sell or rent it. They could even hire movers to do it. Maybe that would be less painful?

My mother-in-law has mentioned a few times that it would be nice to have the rental income. However, it wasn't her father who died. It was her father-in-law. I have offered to help, but they have not taken me up on it. Is there anything I can do to help? Does anyone have experience with this type of situation?

JMO, but this sounds like a leading-a-horse-to-water situation. You have offered help, your mother-in-law wants to rent the house but apparently not enough to take you up on your offer, and your father-in-law and his brother don't seem highly motivated.  Since it is their properties, and there's no impending disaster, I think in your place I would say once more that my help is available whenever they want it, and then I'd drop the topic and try not to let it bother me.  I speak from experience; several years after my mother died, my father said he'd like to downsize and move to our area "next year" and asked for help. My sisters and I pitched in with decluttering, apartment shopping, fixing up his house, etc., and helped him draw up lists of decisions he needed to make.  He dawdled on everything he said he wanted to do. Now that it's been over ten years, we have jointly decided to stop pushing him. If he really wants it, he can make it happen in a couple of months. Till then, we'll just enjoy his company whenever we get together.

But if I'm reading this wrong, and you think they do in fact want to clear the place out but are just too emotionally burdened to do so efficiently, then I might make more actual suggestions, such as volunteering to work there on a specific day or your storage unit idea.

[Fishindude]

Grandpa was probably a wise man to have all of those properties.   I suspect his message is that they should keep all of the rentals going and they will have a cash cow that keeps paying them forever.  If they sell them off they will get a lump sum of cash that will likely be squandered in pretty short order .... that's how it works with most inheritances.

[Car Jack]

I'm sure a discussion before the dead guy kicked it, asking him if he'd be ok to hear that the heirs have no clue what to do and how to do it and that they're paying money for houses that'll never bring in a penny was what he was thinking when putting that stupid request in his will.

This is one of those clear cut cases where the houses absolutely should be sold.  They are a liability at this point....not an asset.

[MoneyMatrix]

Property management at least for the rentals seems to be a good idea at this point.  Cleaning out the house is another issue, very personal, but there are people that can help with that also.

[robartsd]

If they want to honor GFIL's wishes to keep the rentals, I'd suggest getting a property manager to deal with the unit that is not generating income currently. If the property management works well there, they might expand to the units that are currently generating rental income as they turn over. Cleaning out the house GFIL lived in is much more difficult because of emotions that may be attached. If the inheritance isn't causing them negative cash flow, let them deal with it as they can. I'd limit suggestions on how to manage the rentals to dealing with the property GFIL did not live in (offers to help with GFIL's house should clearly be offers to help as they direct, so they don't feel like you're stepping on their toes).