Author Topic: Thoughts on helping family with housing costs by buying property  (Read 1928 times)

FreelanceToFreedom

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Thoughts on helping family with housing costs by buying property
« on: February 17, 2019, 09:32:25 AM »
Long story short, I have several older family members, including my parents, who have little to no retirement savings, no equity (renting), and really no plan for retirement. They are getting older and really shouldn't be working for too much longer, but don't really have a choice right now.

I've been talking to my sibling (who IS financially literate!) about our options. I feel like either way, this will eventually be our problem as we're obviously going to take care of our family members.

As housing is a huge expense for all parties, we've been thinking about options to buy or build a multi-family home, or some kind of shared cohousing space. Basically a hippy commune for all the wayward souls in our family... (not a joke, unfortunately!)

I don't know specifics of how this would work, but my vague thoughts are something like this:

  • I would cover the down payment (sibling may help)
  • I/we would be the owner on paper
  • Ideally we could get a unit suitable for 2-3 couples, with some semi-private space
  • Maybe a large house with a mother-in-law unit, or something similar
  • Family living there could pay utilities, maintenance, taxes, etc.
  • If financially able, they could pay what they could towards the mortgage
  • I/sibling & I would plan to cover the whole mortgage payment
  • Sibling MAY live in the house, depending on how private each unit is. If so, they would contribute a reasonable rent towards the mortgage payment
  • Sibling & I would agree to equity split based on the terms and whose contributing what - we would have it on paper and properly contracted, even though we trust each other
  • Ideally the unit could have some income-producing aspect - i.e. an Airbnb room, a separate rental unit, small farm, etc.

Now, I understand that this is objectively a really bad idea. Totally get that. It's just that I don't see many other options that are realistic.

Right now there are my parents (paying like $1800 in rent), grandmother (paying $1000 in rent) and godmother (paying $1500 in rent) - and none of them can really afford to be paying that much. So from a financial standpoint, getting a mortgage in the $1500-$2000 range makes sense.

I am prepared to help them financially (don't really see another option, and I love them). My thinking is that I'd rather be building equity in a home that they could live in for free/cheap than just be paying their rent.

Has anyone done something similar? Any advice to share? Again, I KNOW THIS IS A BAD IDEA!

hops

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Re: Thoughts on helping family with housing costs by buying property
« Reply #1 on: February 17, 2019, 10:17:47 AM »
There are some houses like this in my neighborhood and one of the problems I've noticed (and I'm sure there are dozens more I'm not privy to) is there's only so much help the responsible parties can provide. They might pay the mortgage but then they're busy with work and their own lives and eventually the properties are in disrepair inside and out because their relatives aren't just deficient at managing their own finances, they're perhaps unskilled at responsibility in general.

As the relatives age, things get even trickier because you never know when health considerations might make your plans less practical. Or whether some of the younger wayward souls in the family (if applicable) might try to worm their way in and take advantage of the situation.

Cassie

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Re: Thoughts on helping family with housing costs by buying property
« Reply #2 on: February 17, 2019, 10:27:02 AM »
Low income senior housing. Have them get on the list now because the wait can be long. You pay 30% of your income for rent.

FreelanceToFreedom

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Re: Thoughts on helping family with housing costs by buying property
« Reply #3 on: February 17, 2019, 10:36:15 AM »
There are some houses like this in my neighborhood and one of the problems I've noticed (and I'm sure there are dozens more I'm not privy to) is there's only so much help the responsible parties can provide. They might pay the mortgage but then they're busy with work and their own lives and eventually the properties are in disrepair inside and out because their relatives aren't just deficient at managing their own finances, they're perhaps unskilled at responsibility in general.

As the relatives age, things get even trickier because you never know when health considerations might make your plans less practical. Or whether some of the younger wayward souls in the family (if applicable) might try to worm their way in and take advantage of the situation.

Good point. I didn't mention this but one relative who would be living there is in property management and was a handyman for much of his career. So fortunately that shouldn't be much of an issue for the foreseeable future. It also means that the house could potentially be a bit of a fixer-upper that he could make improvements to in retirement.

FreelanceToFreedom

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Re: Thoughts on helping family with housing costs by buying property
« Reply #4 on: February 17, 2019, 10:39:49 AM »
Low income senior housing. Have them get on the list now because the wait can be long. You pay 30% of your income for rent.

Worth looking into, thanks. Unfortunately some parties are pretty picky AND broke haha.

I can see them eventually doing something like senior housing, but only if it was absolutely the only option.

I'm trying to be proactive in this before the shit hits the fan, hence the house idea. But I appreciate the suggestion and I will look into it.

Knapptyme

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Re: Thoughts on helping family with housing costs by buying property
« Reply #5 on: February 17, 2019, 10:56:46 AM »
Well, I bought the house across the street from me as both a rental property (for now) and a potential landing place for my parents. Not that they're irresponsible, but there's going to come a point where they can't/shouldn't live in a cold weather climate anymore and can no longer fully care for a home by themselves.

While I agree, your idea may be a bad idea in terms of investments, it's admirable and thoughtful considering your family. Keep working out the details to make sure it's really doable. The next concern is how long is it until they need care beyond housing.

hops

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Re: Thoughts on helping family with housing costs by buying property
« Reply #6 on: February 17, 2019, 11:08:38 AM »
There are some houses like this in my neighborhood and one of the problems I've noticed (and I'm sure there are dozens more I'm not privy to) is there's only so much help the responsible parties can provide. They might pay the mortgage but then they're busy with work and their own lives and eventually the properties are in disrepair inside and out because their relatives aren't just deficient at managing their own finances, they're perhaps unskilled at responsibility in general.

As the relatives age, things get even trickier because you never know when health considerations might make your plans less practical. Or whether some of the younger wayward souls in the family (if applicable) might try to worm their way in and take advantage of the situation.

Good point. I didn't mention this but one relative who would be living there is in property management and was a handyman for much of his career. So fortunately that shouldn't be much of an issue for the foreseeable future. It also means that the house could potentially be a bit of a fixer-upper that he could make improvements to in retirement.

Assuming he's good at what he does and is still very physically and mentally sharp, that would slightly lessen the property upkeep worry. Our house was previously owned by a couple whose handyman father/FIL had creative ways of doing things that have caused some interesting headaches for us. They thought his renovations were great at the time but some turned out to be dangerously half-assed.

Villanelle

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Re: Thoughts on helping family with housing costs by buying property
« Reply #7 on: February 17, 2019, 11:51:37 AM »
Low income senior housing. Have them get on the list now because the wait can be long. You pay 30% of your income for rent.

Worth looking into, thanks. Unfortunately some parties are pretty picky AND broke haha.

I can see them eventually doing something like senior housing, but only if it was absolutely the only option.

I'm trying to be proactive in this before the shit hits the fan, hence the house idea. But I appreciate the suggestion and I will look into it.

To me, this is why this plan would ultimately be a disaster.  If the parties aren't realistic and choose to be foolish about money, they are just going to spend whatever they've promise to contribute.  Come tax time, they will have blown their money on a new sofa because the old one had worn fabric. 

You can't help people who refuse to be realistic.  And they are not going to appreciate what you are going because all they are going to see is the things about which they are picky--they don't want to live on the street yo've chosen.  The bedroom is too small.  Why don't they get the room with the attached bath?  The dining room table provided by you or the on of the other couples is ugly and the chairs are uncomfortable.  They "need" a king sized bed.  They have to have a vacation to get away from the chaos of such a full house.  They want a bigger yard for gardening/a smaller lawn for upkeep. 

If they don't see the reality of their situation, they aren't going to be happy with whatever you provide and they are unlikely to ultimately follow through on their financial obligations to you.  And there's a very good chance that what they will see when you do this is your willingness to open you wallet and soon you'll be getting calls when they can't afford groceries or the electric bill because they blew their money on unnecessary things.

There are lots of ways to help family struggling financially.  You and they will both be better off if you offer resources and time, rather than money. 

You said they'd do senior housing if it was the only option.  Well, make it the only option.  Help them with the process. 

Cassie

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Re: Thoughts on helping family with housing costs by buying property
« Reply #8 on: February 17, 2019, 02:42:30 PM »
Senior apartments can be really nice. I know 2 people that live in them.

LadyMaWhiskers

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Re: Thoughts on helping family with housing costs by buying property
« Reply #9 on: February 17, 2019, 04:05:20 PM »
I've been talking to my sibling (who IS financially literate!) about our options. I feel like either way, this will eventually be our problem as we're obviously going to take care of our family members.

As housing is a huge expense for all parties, we've been thinking about options to buy or build a multi-family home, or some kind of shared cohousing space. Basically a hippy commune for all the wayward souls in our family... (not a joke, unfortunately!)
.......

Has anyone done something similar? Any advice to share? Again, I KNOW THIS IS A BAD IDEA!

This doens't even seem like such a bad idea. Do these folks want to live together? All I'd say is if they are getting SS or something, take a portion from each for the property taxes and pay them yourself. Be prepared to pay all the required expenses yourself (or you + sib, with good paperwork.)

There's nothing wrong with taking on elderly dependents, as long as it's clear that's what's going on. Most cultures have done it more or less that way for eons.

waltworks

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Re: Thoughts on helping family with housing costs by buying property
« Reply #10 on: February 17, 2019, 07:50:34 PM »
I would only do this if you have power of attorney. Otherwise, you will simply end up with a financial black hole AND angry relatives.

Give them an allowance. This is what we do with my mother in law, who is 67 and broke thanks to frittering her money away for 40 years. She gets free rent, but she can only spend an allowance every month. The rest of the money is invested on her behalf (to cover anticipated expenses as she ages) by us.

If you want to be the parent, you have to pretty much lay down the law. Your relatives may not be comfortable with that, though.

-W

Villanelle

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Re: Thoughts on helping family with housing costs by buying property
« Reply #11 on: February 17, 2019, 08:28:04 PM »
I've been talking to my sibling (who IS financially literate!) about our options. I feel like either way, this will eventually be our problem as we're obviously going to take care of our family members.

As housing is a huge expense for all parties, we've been thinking about options to buy or build a multi-family home, or some kind of shared cohousing space. Basically a hippy commune for all the wayward souls in our family... (not a joke, unfortunately!)
.......

Has anyone done something similar? Any advice to share? Again, I KNOW THIS IS A BAD IDEA!

This doens't even seem like such a bad idea. Do these folks want to live together? All I'd say is if they are getting SS or something, take a portion from each for the property taxes and pay them yourself. Be prepared to pay all the required expenses yourself (or you + sib, with good paperwork.)

There's nothing wrong with taking on elderly dependents, as long as it's clear that's what's going on. Most cultures have done it more or less that way for eons.

It's not a bad idea if they are willing to fork over almost endless amounts of cash, or if they have an actual reason to believe that this won't leave to permanent economic outpatient care.  And if they are perfectly okay not actually have the family pay whatever they are supposed to in this transaction--property taxes, utilities, for their own groceries, whatever. 

There certainly isn't anything wrong with helping family.  it's admirable.  But it also frequently goes terribly awry, probably most commonly where it isn't a huge part of a culture.  And when the OP posts that the family is "picky" and therefore won't consider what might be the best option given their financial situation, that doesn't suggest they accept the gravity of the issue are are willing to make changes. 

I've seen this go bad with someone very near to me.  The aging parent appreciated nothing.  No matter what her adult child and his spouse did for her, she just amped up her spending.  There were tearful phone calls when she couldn't even afford groceries, after a home shopping network binge.  There was complaining because her house wasn't large/nice enough.  There was downright nastiness any time they attempted to say no. 

Of course that doesn't always happen.  But it happens a lot.  And the projected unwillingness to consider senior housing is a massive red flag. 

Linea_Norway

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Re: Thoughts on helping family with housing costs by buying property
« Reply #12 on: February 18, 2019, 01:39:28 AM »
I've seen this go bad with someone very near to me.  The aging parent appreciated nothing.  No matter what her adult child and his spouse did for her, she just amped up her spending.  There were tearful phone calls when she couldn't even afford groceries, after a home shopping network binge.  There was complaining because her house wasn't large/nice enough.  There was downright nastiness any time they attempted to say no. 

Of course that doesn't always happen.  But it happens a lot.  And the projected unwillingness to consider senior housing is a massive red flag.

There have been several threads on this forum with relatives who don't appreciate with what is being done for them and who take advantage of their frugal children. That creates a toxic relationship between parent and child.

So I support the idea of putting them in elderly housing that they can afford themselves and help them from there. But don't tie yourself financially to their situation, because they might very well start abusing that.

Duke03

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Re: Thoughts on helping family with housing costs by buying property
« Reply #13 on: February 18, 2019, 12:37:43 PM »
Not to be Debby downer but do you have kids?  The way I feel about stuff is I refuse for my kids to have to go without something so my money can be spent on an adult that had their entire life to get their shit in order...This goes for adults I love and care about.  My mom is horrible with money and has blown several windfalls over the course of her life totaling several hundred thousand dollars.  Today she finally figured out how to live on a budget.  It's amazing what a fixed income on social security will make a person do when they are at the end of the road and can't rob Peter to pay Paul anymore.  Of course I still hear her complain about how she should get to use her money for fun stuff and medication is expensive.  If I can manage to save, invest, and max out 4 different retirement accounts plus raise two kids on a single income household you won't get a penny of compassion from me..... 

Malkynn

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Re: Thoughts on helping family with housing costs by buying property
« Reply #14 on: February 18, 2019, 02:59:55 PM »
Oh my...

That's a lot of moving parts...

I won't go into my own details, but suffice to say, I completely understand your drive to do this. However, there are a lot of bad, expensive, and dramatic outcomes for you to consider.

Questions I would be considering:
-If shit goes sideways, will it end up costing me more than I would have been willing to donate to their lifestyle otherwise?
-Why are these people broke? Will those factors contribute to the downfall of this plan?
-Are these the type of people who are likely to maintain a positive and grateful attitude or are they unfortunately the more common kind of people who become counter-intuitively resentful about being helped?
-Is my sibling on the exact same page that this really is charity, are we both aligned on how much charity we are willing to provide?
-What happens if someone leaves? Will it be easy to rent to non family members? How will the family members react to new people in the building who aren't family?
-How will the family react if a family member needs to be evicted? Will sibling and I end up "bad guys" even after all of this charity?
-Can I afford to buy my sibling out of this charity project if necessary? Will that still fall within the parameter I previously decided upon as the max charity I was willing to provide?

Like PPs, I'm deeply alarmed by you describing your broke relatives as "picky" because in this context that directly translates to "entitled", which is not a mindset that you want to be stuck in financial bed with.

It's difficult for reasonable people to anticipate how unreasonable people will behave, which is why so many seemingly rational arrangements between people fall apart so spectacularly.

You don't even seem to want to do this, you seem to feel like it's really just the least awful of all of the options...on the surface. It's not easy to make a rational decision when none of the options make you feel good. It's smart to get feedback and may even be worth seeking professional help navigating your way through the obviously complex feelings here, maybe even with your sibling.

Lady Stash

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Re: Thoughts on helping family with housing costs by buying property
« Reply #15 on: February 18, 2019, 04:21:45 PM »
Another option might be to offer to gift them a down payment.   Maybe offer each of them 10K for a down payment and suggest they pool it to buy a place or buy something very inexpensive on their own.

I personally wouldn't get involved in an ongoing financial transaction.  Too many ways this can go sideways even though it's starting with the best of intentions.

I gave a sibling $ for a down payment on a house a couple years ago.  It made it possible for him to buy a place instead of renting.  He was years away from being able to pull together a down payment on his own but very stable about making regular payments.   TBH, it frustrates me that he doesn't save more.  They go out to eat a ton and have very expensive cars.  He actually used some of the 'down payment' $ to remodel the home which I wasn't intending, but hey it was a gift.

I love spending time with this sibling.  This was a way I could help him make a solid financial move.  Because it was a gift I don't get all strung out and worried when he continues to make minor financial choices that I wouldn't.  I enjoy that he's building equity in a house and leave it at that. 

If my finances were more permanently tied in with his, I would be a lot more tempted to judge his spending habits and get incredibly frustrated because they would impact me more directly.

TL;DR  For your relationships, if you are determined to help, consider a one time financial gift rather than an ongoing co-mingling of finances.

« Last Edit: February 18, 2019, 04:28:56 PM by Lady Stash »

Cassie

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Re: Thoughts on helping family with housing costs by buying property
« Reply #16 on: February 18, 2019, 06:42:42 PM »
Help family find resources but donít give money. It never ends well. Broke people canít be picky. You are a enabler and they wonít appreciate it.  You will be the bad guy or you will be expected to support them for life and requests will escalate.

MayDay

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Re: Thoughts on helping family with housing costs by buying property
« Reply #17 on: February 19, 2019, 06:25:09 AM »
I assume all 3 have SS. 

I would take a look at what each of their actual income is, and expect them to pay 1/3 of that to housing.  Then look at what a basic apartment rents for in your area.  Can they afford that?  What is the gap?  Consider just paying the gap.

Moving 3-4 elderly people into a house seems like a terrible idea.  As each of them dies or is in need of more significant help, who is going to be the one wiping butts? 

I am kind of amazed that them being picky is the reason to help them vs. a senior apartment.  lol for days.  Nope.

This has disaster written all over it.

Linea_Norway

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Re: Thoughts on helping family with housing costs by buying property
« Reply #18 on: February 19, 2019, 06:27:47 AM »
I assume all 3 have SS. 

I would take a look at what each of their actual income is, and expect them to pay 1/3 of that to housing.  Then look at what a basic apartment rents for in your area.  Can they afford that?  What is the gap?  Consider just paying the gap.

Moving 3-4 elderly people into a house seems like a terrible idea.  As each of them dies or is in need of more significant help, who is going to be the one wiping butts? 

I am kind of amazed that them being picky is the reason to help them vs. a senior apartment.  lol for days.  Nope.

This has disaster written all over it.

Indeed. They are only picky if you financially allow them to be so. Otherwise they would have to live within their own means, which would be much better.

K-ice

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Re: Thoughts on helping family with housing costs by buying property
« Reply #19 on: February 19, 2019, 03:32:23 PM »
Finding the right place for 4 people will be a challenge.

This is a garden suite that was built for a "grandma" in the back-yard is an interesting option.

http://bldg.ca/portfolio-item/cameron-garage-suite/

The suite is designed so she can currently sleep in the loft but the main floor has space for a bed if needed. I do not know how they handled it financially or if the grandma pays rent. I do know it is just 1 title with the main house. Maybe a house for the parents and grandma with something like this in the back for the godmother. In the best case the house even has a basement suite you can rent to someone else for income. 

In parts of Europe it is common for a multiplex to house many generations. I know a family where the parents are on the main floor. The daughter (family of 5) is in the middle and the son is upstairs.  I believe the parents bought the land and built the shell and then the children were financially responsible for finishing the inside. The son finished his space about 6y after the daughter. (I think he lived on the main with the parents until he was ready.) His new place is 3 bdm too, so there is room to grow. On title I am not sure who owns what. It would not be uncommon for the parents to own it all but the children will inherit the floors when the parents pass.  That is 8 people comfortably living on a lot no bigger than most single family homes. The grandfather needs constant care so it is good to have family close by. 

I am a big fan of multi-generational family living and I think there should be more options and better zoning in North America for this. I have dreamed of a place with a central shared kitchen and a wing(s) for my parents and inlaws. So I get your desire to help them.

However, taking on the financial burden of living expenses for 4 people is a huge undertaking. I am not sure of the best way to do it without loosing your own shirt.

marymurphy

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Re: Thoughts on helping family with housing costs by buying property
« Reply #20 on: February 20, 2019, 08:32:55 AM »
My wife and I are in a similar situation with my parents and her parents. I'm hoping to avoid getting involved with this kind of help, but I think it may be necessary at some point.

BrightFIRE

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Re: Thoughts on helping family with housing costs by buying property
« Reply #21 on: February 21, 2019, 03:19:39 PM »
Low income senior housing. Have them get on the list now because the wait can be long. You pay 30% of your income for rent.

Worth looking into, thanks. Unfortunately some parties are pretty picky AND broke haha.

I can see them eventually doing something like senior housing, but only if it was absolutely the only option.

I'm trying to be proactive in this before the shit hits the fan, hence the house idea. But I appreciate the suggestion and I will look into it.

You should get them on a waiting list sooner than later. My mom has been on a waiting list over 2 years and nothing yet. Put them on the list - they (or you) can always say no when the time comes, but it's an option you won't have if you don't get them on the list.

JoJoP

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Re: Thoughts on helping family with housing costs by buying property
« Reply #22 on: February 23, 2019, 04:56:50 PM »
Finding the right place for 4 people will be a challenge.


In parts of Europe it is common for a multiplex to house many generations. I know a family where the parents are on the main floor. The daughter (family of 5) is in the middle and the son is upstairs.  I believe the parents bought the land and built the shell and then the children were financially responsible for finishing the inside. The son finished his space about 6y after the daughter. (I think he lived on the main with the parents until he was ready.) His new place is 3 bdm too, so there is room to grow. On title I am not sure who owns what. It would not be uncommon for the parents to own it all but the children will inherit the floors when the parents pass.  That is 8 people comfortably living on a lot no bigger than most single family homes. The grandfather needs constant care so it is good to have family close by. 

I am a big fan of multi-generational family living and I think there should be more options and better zoning in North America for this. I have dreamed of a place with a central shared kitchen and a wing(s) for my parents and inlaws. So I get your desire to help them.

However, taking on the financial burden of living expenses for 4 people is a huge undertaking. I am not sure of the best way to do it without loosing your own shirt.
  I love the European tradition.
I've just taken care of 2 relatives, both who could no longer live independently.  It was VERY hard.   I completely applaud your efforts to take care of people that love you, but I urge caution. It's hard. So so hard.   You said they are picky.  UGH... that's a bad start!

It should be a labor of love (sounds like it is) and not an investment.  We actually upsized and bought a huge house to move an elder in.  She had the master bedroom suite... bigger than her little senior apartment, and all her familiar furniture in it.  She contributed a portion of the house payment...which was actually far less than her assisted living apartment, so it actually was a good choice financially to make her money last.  Those care places cost a fortune, AND she wasn't getting the care she needed.  Plus she was lonely.   I was going by the senior place almost daily, and feeling spread thin.   She was absolutely 100% on board with the move, and that was a crucial component.  She lived here until she passed away.  It was very restrictive on us at the end, due to the round the clock care involved, but I would do it again, with out a doubt. It was a gift of love to my dear gram. 

Then, a few years later, we moved my mom in with us after some alarming things happened to her during independent living. She had dementia, but it took us a while to figure that out.  She'd been in her house for almost 40 years.   With mom, it was a bumpier road to be the caregiver and have all of us under one roof, while dementia set in.  We loved it, but it called for more diplomacy.   After a year or so, we bought a little house down the street and got caregivers to come in. That mostly worked out until the dementia got really bad.  She needed 24 hour care and supervision, and we moved her to a dementia senior care facility.  She thrived there, was safe, well fed and social.   

What amazed me in both care situations was how fast they changed.  Just when you think you've figured out a great plan, their skill level and needs change.  It was tough.

Unless taking care of all 3 of them is part of your long term plan, I'd use caution. You may well be the one to take care of them when it's no longer a choice.  But, for now... Do they think this is a good idea?  Do they get along? Seniors can be blunt under the best of times, if illness, physical handicaps or dementia set in, it could be a rough go for you, especially if you don't have a backup plan or help. Do you do all the shopping?  Who cooks?  Can they drive or need to be driven?   Where are their doctors?  What about the all important social life-- can they still get to activities and friends from the new location?  Keep their world as large as possible for as long as possible.   I'd really talk it out with them, your brother, and family.  Think through the "what if's".  Perhaps help, but not do it for absolutely free, because it might be better for everyone to feel like and be a contributing household member.   It sets a tone/boundary for the arrangements so you and your brother get a little respect and so do they.  Maybe what ever they can actually afford, minus 20%.   Let them buy what they want at the grocery store with their own money, whether lobster or mac and cheese.

 Also, the senior center in your area might be a great resource.  Services like Meals on Wheels can be great regardless of where they live. 

Finances_With_Purpose

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Re: Thoughts on helping family with housing costs by buying property
« Reply #23 on: February 24, 2019, 12:46:24 AM »
I would only do this if you have power of attorney. Otherwise, you will simply end up with a financial black hole AND angry relatives.

Give them an allowance. This is what we do with my mother in law, who is 67 and broke thanks to frittering her money away for 40 years. She gets free rent, but she can only spend an allowance every month. The rest of the money is invested on her behalf (to cover anticipated expenses as she ages) by us.

If you want to be the parent, you have to pretty much lay down the law. Your relatives may not be comfortable with that, though.

-W

This. 

Much, much easier way: let them all pick a rental and you can toss in on rent if you feel that you absolutely must.  That can be disentangled far faster/easier and far cheaper.  In almost all markets, rentals are cheaper right now than ownership, so why bother?  Only if you're wanting to make money, and the one thing that every single person here has told you (and I fully agree) in a thread full of great reasons why not to even think about doing this is that this is giving money away. 

There's not a great way to save on the amount you're giving away by entangling yourself more.  This is charity.  And it can go wrong in all the ways that charity does.

MrThatsDifferent

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Re: Thoughts on helping family with housing costs by buying property
« Reply #24 on: February 24, 2019, 01:08:12 PM »
Ok, since you already know this is a bad idea and you also realize you have to do something, why not just buy a duplex, parents on one side and the others take the rest? The 4 of them are paying $4300 in rent? Iíd think youíd be able to find something and they could pay half of what theyíre currently paying to cover the mortgage. You can provide the down payment and let them contribute. Make sure you get good insurance to protect yourself but I donít think itís an awful idea to be honest. You seem to have the cash to do this, having them all as neighbors would be nice, if theyíre all up for it. Thatís a very nice thing youíre trying to do, I hope it works out.

chasesfish

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Re: Thoughts on helping family with housing costs by buying property
« Reply #25 on: February 24, 2019, 05:23:05 PM »
If you could find/afford a triplex, I would do it.  I have similar issues in my family, but getting them to move would be a nightmare.  One thing I wouldn't do is buy their existing house, whew boy I watched a family member do this.

I would actually draw up formal leases and rent amounts too, even if you never actually collect it.  You would have a debt against the estate and a debt they could pay if you have to do an asset sell-down to get them into a medcaid paid nursing home. 

Villanelle

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Re: Thoughts on helping family with housing costs by buying property
« Reply #26 on: February 25, 2019, 02:08:02 PM »
Chiming in again to say this:  What advice would these people be given if they came here and posted their situation?  I'm not talking about the outlying advice that would tell them to live in their cars or move to Thailand.  What would the average response be?  Then, ask yourself whether they'd be willing to even come close to follow that advice.  If not, why on earth would you throw money at their problem?   You can't want something more for someone else than they want it themselves.  If they want so sort their finances and living situation--truly want it, which means being willing to sacrifice to make it happen--then it is absolutely both loving and helpful to help them.  If they don't, then it is enabling them which isn't truly helping them and is hurting you (emotionally and financially).  So, if they truly want it and are motivated, help. But "help" can often mean things like helping them find resources, helping them sign up for senior housing lists, going over their budget and helping them look for and make cuts, calling the cable company for them (with permission, of course) to cancel cable, helping them set up a cheap cell phone plan, helping them sell expensive cars, etc.  That is true help.  Giving money (or in effect giving money by reducing their rent obligations) to people who are bad with money isn't help.  It can be hard to say no to family or to watch them struggle, but acting out of love in ways that aren't productive helps no one. 

So, are they willing to hold themselves to higher standards?  Truly?  Are they willing to change?  Are they willing to stop being picky, because they simply can't afford to be picky?  Or are they going to dig in their heels and hide behind their pride and sense of entitlement?  Regardless of the answer, it doesn't seem like giving them a home is the best answer.  Because if they are willing to change, then they have enough money that they can afford options on their own.  And if they aren't, any penny you give them will be spent into the void of irresponsibility. 

Lmoot

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Re: Thoughts on helping family with housing costs by buying property
« Reply #27 on: February 27, 2019, 04:31:42 AM »
No. As someone who just this week paid over $10k to replumb an old house and repair the sewer line, you cannot possibly expect them to pay for maintenance on a house of that size. Or you.

You will not simply be the financier, you will also be the one they call for every little thing, all the way down to the TV/computer wonít turn on.

getting there pnw

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Re: Thoughts on helping family with housing costs by buying property
« Reply #28 on: March 01, 2019, 04:33:15 PM »
Very interesting. I'm doing something similar. I bought my mom a condo, and have a fiveplex and a duplex. The cashflow from the fiveplex and duplex pay my mom's condo's mortgage. I respect what you're contemplating. I just say think about the cash flow carefully. If you can do it frugally (fixer?) that will help. Also, prepare for an exit plan for you or your sibling, especially with the sibling living in the house. If he or she wants to move out, how does that effect the equity situation between you and the sibling?

JoJoP

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Re: Thoughts on helping family with housing costs by buying property
« Reply #29 on: March 05, 2019, 09:28:43 AM »
If you could find/afford a triplex, I would do it.  I have similar issues in my family, but getting them to move would be a nightmare.  One thing I wouldn't do is buy their existing house, whew boy I watched a family member do this.

I would actually draw up formal leases and rent amounts too, even if you never actually collect it.  You would have a debt against the estate and a debt they could pay if you have to do an asset sell-down to get them into a medcaid paid nursing home.

I like this idea.  Buy a triplex and let them move in. Or a duplex that can house all of them.  Except I'd charge something for rent... even only 30-50% of market rate, just so that they've got some skin in the game.  Lots of times, people don't value something that comes too easily, so just a little tiny bit of commitment makes it a team effort, not you just slaving away to improve their lives in spite of themselves.  If you know going in that they have a sense of entitlement, don't expect that to get any better as time goes on.  A few parameters could make this a win-win situation for everybody.

Blueberries

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Re: Thoughts on helping family with housing costs by buying property
« Reply #30 on: March 05, 2019, 10:55:27 AM »
If you could find/afford a triplex, I would do it.  I have similar issues in my family, but getting them to move would be a nightmare.  One thing I wouldn't do is buy their existing house, whew boy I watched a family member do this.

I would actually draw up formal leases and rent amounts too, even if you never actually collect it.  You would have a debt against the estate and a debt they could pay if you have to do an asset sell-down to get them into a medcaid paid nursing home.

I like this idea.  Buy a triplex and let them move in. Or a duplex that can house all of them.  Except I'd charge something for rent... even only 30-50% of market rate, just so that they've got some skin in the game.  Lots of times, people don't value something that comes too easily, so just a little tiny bit of commitment makes it a team effort, not you just slaving away to improve their lives in spite of themselves.  If you know going in that they have a sense of entitlement, don't expect that to get any better as time goes on.  A few parameters could make this a win-win situation for everybody.

I agree with the above.

I have been in a similar situation OP.  One thing I strongly agree with is that you must charge rent (even if it's small).  I was hesitant to do this in my situation and I ended up regretting it.  If spending is a problem, charging rent is even more important.  Free rent means you can spend more on a bunch of shit.  And, as someone alluded to above, paying rent means they will respect you and the home more since they are contributing.

Good luck to you.