PIL are getting older and beginning to need a 'one level' home. DH and I could help...(34 Posts)
Sorry could be long but best to paint a clear picture.
PIL and I are not the best of friends... civil would just about cover it but they are DH's parents and I hate to see him worry.
PIL are now 70 and 68, MIL has problems with arthritus and uses the aid of a stick from time to time. They are both completely fine in other ways.
MIL was telling DH over christmas that it would be much easier on her if they lived in a home with no stairs, they currently live in a two uo two down council house with seven steps leading from the street to the garden. They live in a council house through choice, they both worked and choose to spend their money and stay in a home that had low rent, all repairs dealt with etc.
DH suggested they look into where they would stand with the council re-locating them. MIL said they have friends in that position and the list is 'ENDLESS'.
Last weekend PIL pointed out a property in the local paper 'two bed cottage, needs updating'. The property is about 2 miles from their current home and a few streets away from MIL's brother and his wife. This was just in passing with the phrase 'a great buy for someone' .
I mentioned it to DH, we went and viewed it and it is a decent buy. Would be around £98,000 including legal fees and I think would need another £15,000ish to get it to a decent standard. We could afford this, not with great ease but it is possible.
So.... the point of the post... DH and I had PIL over last night and explained we are considering this (expressed it was very early days and just a consideration), We could just afford it and would take the same rent they currently pay, they would be responsible for all bills and we would cover all repairs, maintenance. MIL responded, that would be great etc...
As we dropped tham home MIL announced... how good, we would have inheritance to leave you boys (DH and his Bro) atlast .
DH explained that we would own the house... mil said but we would own together, we are contributing to the mortgage!
Is this going to be mor hassle than it's worth? This house would be MY pension, we can't put into everything!!!
Has anyone else did this, did it cause tension?
I wouldn't do it - theres so many problems it could cause. They need to put themselves on the list to transfer to a one bed bungalow, and in the meantime see about getting a handrail put in.
My GPs got into a bungalow very quickly on a council transfer, as did GMIL
As theirs is a council house if they get any benefit towards housing I don't believe it will continue if its a family member that owns it. - check that if they do claim benefit as I'm not 100% sure how that stands.
Sounds like a no to me - they are no more contributing to the mortgage than they would be if they were renting from any other landlord. If they don't get that you just don't want to even get started
I'd push to get on a list to move To a smaller home im sure it wont take long. I think it will cause problems. LL arrangement is hard enough with friends let alone family, look at all the condensation questions- whose liable. Do they have to ask permission to do x y z? If something needs doing are they going to drive you potty? I also think the bro in law situation is going to be awkward.
I've 2 family members who are LL's I wouldn't rent from either purely because it could cause problems.
I would not do it.
Not when they have that attitude.
The house will be mortgaged, and you are doing this to help them, not to benefit financially. You have the hassle, the legal work. They would not get a mortgage in their names, as retired pensioners in a council home. They are renting from you at a subsidized rate. You are still landlords responsible for repairs and maintenance. Mortgage terms are usually 35 years, and they dont plan to live long enough for the house to be paid off.
I think they should put themselves on a home swap list to a one bed flat in a block of flats instead, this would be a lot easier for them, and you.
As an aside from the financial aspect, would it be better to look at independent but warden-assisted living in order to avoid them having to move again in a few year's time as their health/mobility deteriorates further?
You could end up with a property that they can't live in and you can't sell.
No no no no no
If they go into care and they are on the mortgage, they/you'll have to sell to contribute to care until they only have £23000 left
More trouble than its worth
My SIL bought a house with a granny annex last year, in March I think it was, mil lived in it for about 2 weeks .... In and out of hospital and finally died in August. SIL now stuck with house too big and can't afford to move again yet due to what they spent on fees etc last time.
Look to the council, sounds like they have a perfect starter home to swap. There will probably be a family in a flat that would swap?
They would need a tenancy agreement and be kept totally separate from you financially. I assume you also put down the deposit? They need to view it as a tenancy, not a home ownership. And if they cant, well, then they continue on the path they have chosen all their lives so far!
If you do it you should definitely do it as their landlord and they pay rent. If the house is in their names and they need residential care as they get older then a proportion of sale proceeds would likely have to pay for it. I'm not sure how the rules work if the house is partly in your name too but definitely worth checking.
Long term rent costs also might be an issue - I get the impression they wouldn't be happy with you putting the rent up (ever!) and you could end up paying a significant extra mortgage without enough rent to cover it.
Out of curiosity, would the monthly mortgage be higher or less than they are paying now? Would you be funding them every month, or would their current rent just about cover mortgage and landlords buildings insurance? As a landlord you also need to do gas safety inspection costing a couple of hundred each time, and electricity checks, etc.
WAY too complicated. Don't do it, it's causing
deliberate misunderstandings already.
No to me too. This is a disaster waiting to happen. Family squabling over money is no fun.
So u borrow money to buy and renovate house, PIL move in and pay rent, then BIL reaps the rewards when anything happens to PIL?
That might seem a harsh way of putting it but it sounds like you're going out if your way to be helpful yet you come out if it worse off at the end.
If u do this it HAS to be with u and DH as owners and PILs as tenants. BIL doesn't even feature in it.
Thank you for all the advice. I have just copied them onto an email and sent them to DH!
I will try to answer all the questions....
PIL don't claim any benefits, they have a decent pension pot but definately spend it every month.
They currently pay £58 a week in rent, so just over £3000 P/A. DH and I would need to put between £38,000 and £43,000 in cash for deposit and renovation and then take out a mortgage (on top of our own) to the value of around £78,000. This would be over 15yrs (the term remaining on our current mortgage) and the rate we have been offered is fixed for the first 5yrs. Our repayments on the mortgage for them would be just over £7000 P/A (so a £4000 difference each year).
MIL seems to think she would be 'investing' in the house and therefore entitled to leave her 'half' to BIL when they snuff it!
Look into housing association sheltered accommodation or other type of accommodation. There can be a faster turn around and they are usually really nice. You can go and look around and then complete the application. Your council housing section, online, should list the local schemes. No need to buy you can rent.
DH and I would also be responsible for all upkeep and repairs... may cost us a little or LOTS!
I have suggested that DH looks into a 'swap' through the local authority on his parents behalf as this money is not by any means spare... it is my pension fund! We could not afford to pay out so much and pay into a pension for me too.
BIL is also in a good job, no DC's but a long term relationship. DH and I have 3DC's.
I feel MIL is 'old and ditzy' when it suits... perhaps I am being mean
Do you think your mil is more cunning that you think? That she is now banking on you offering that they life rent free, so as not to invest in the property?
In the grand scheme of things, £240 pcm is nothing, compared to what you put up. Do you reckon she is trying to sway you into subbing it all, in order for you to keep it all as "yours", rather than persuading her that they dont have "half" of it?
If you have a proper tennancy agreement and they're not mentioned in the house deeds or mortgage then they can't claim it from you for their inheritance - particularly if they're dead
You just need to say that it is a 'buy to let' and you have to 'let it' properly and officially at the same rent they're paying now or you can't do it.
what i mean is, it doesn't matter what MIL thinks.. she won't own any part of the house... and her solicitor or will executer will know that. So long as you make sure BIL knows that too it should be fine.
Another option maybe for BIL to go halves with you on the house? PIL pay rent with a tenancy agreement, she can 'think' she is leaving to both of her sons when she dies but legally she's never had a stake In it and no problems with BiL as he owns half anyway.
up to you if you do it or not, but you need to make it all official, they sign a tenancyagreement...etc
You also need to make clear to BIL , his parents are not buying a house, that it will be use, and no part of it will be part of there estate....
From family experience these things can be messy (My fathers family sued my family - or my fathers estate over a business he had bought and paid for from his parents - they didn't win as it was all done legally - however not what you want to deal with when you loose a husband/father) - greedy fuckers
It gets worse...
They will be paying you less than its costing you and still wanting to leave half to other son who (at the moment at least) has no connection to the property.
Either she's really not with it or she's so with it she's sly! You decide OP.
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