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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think that buying PIL's a house would not be a good investment

119 replies

Plateofcrumbs · 06/06/2014 09:07

Before I start want to say I am genuinely canvassing opinion here - have framed as an AIBU but am open to people's thoughts.

PIL's have been considering moving house for some time to somewhere that would be more suited to their later years - they currently live in a fairly remote cottage which needs work.

A house has become available next door to BIL and an idea has been floated that this could be suitable for them. It is way out of the range of what PILs could afford themselves so would involve a 3-way split between PILs/BIL family/ourselves.

We have enough money saved that we could buy 1/3rd of the house from about half our savings. DH was able to save a good chunk of money in a period that he had a lucrative contract and we were living well within our means. Since then we have moved house, doubled our mortgage and I am about to go on maternity leave with our first child. DH is still paid well but finds his job very stressful.

Buying the house for PILs is being pitched as a "good investment". I am happy in principle to help PILs financially but AIBU to see this as potentially a very risky "investment"?

OP posts:
Original poster
Plateofcrumbs · 06/06/2014 11:44

grocklebox responding to your comment: "But I'm surprised that almost all of the focus here seems to be on the money, when its about much more than that." - well I did set that up as the question.

Obviously there is more to it than the money - but at the moment the justification for considering the idea (from DH/BIL) seems to be that it would be a good investment.

The property is a 3 bed semi, much bigger than their current cottage, with substantial garden. If it wasn't next door to BIL I don't think PILs would even dream of taking it on - until now they've been looking at small retirement bungalows etc which might be within their means.

I would absolutely be happy to contribute a smaller sum towards ensuring they can get a comfortable and suitable home for their retirement but this idea seems a bit OTT.

OP posts:
Flyonthewindscreen · 06/06/2014 11:47

So this property wouldn't even be a downsizing for your PIL? And they still wouldn't be moving to a property suitable for their later years? I think you should stress that the property isn't suitable, as much as you aren't prepared to fund it. This makes you less the bad guy. It sounds as though your DH/BIL have got carried away with the idea of PIL being able to live next door and haven't thought about the practicalities at all.

trikken · 06/06/2014 11:50

Been there, done that and I wouldn't do it again. It all ended up very badly and was expensive to sort out.

cozietoesie · 06/06/2014 11:50

....with substantial garden.......?

Oh Dear - for that alone, I would say No. (Although be prepared for your DH and BIL to come out with the 'But we only need planning permission to sell that for building and make a fortune'.)

cozietoesie · 06/06/2014 11:52

I guess tat what I'm thinking is - if you want to invest, invest. If you want to help your PILs then help them. Just don't mix up the two in your mind.

Original poster
Plateofcrumbs · 06/06/2014 11:52

Well exactly Kamer

OP posts:
cozietoesie · 06/06/2014 11:52

*that

Petrasmumma · 06/06/2014 11:58

I wouldn't either. It's the wrong time to deal with this and this is a rather complicated investment at best.

Investing is one thing when you own the whole property. You'd be one of three groups in the mix, which makes it three times more complicated if anything goes wrong. Add to that the fact the groups are related and one of the groups is your DH's and BIL parents, which means it will be harder to make financial decisions without the emotional aspect.

You won't be able to liquidate your "investment" if you need money because of the groups involved and as others have said, the property market can go down as well as up. If you wanted to tie up significant money like this on a long term basis, there are much safer options.

You'll need a set of legal agreements if you're being sensible when you enter into this arrangement and be prepared to spend a small fortune on legal fees if anything goes wrong to get out. And if anything goes wrong, you won't be falling out with business partners, but with family.

Sorry. I'd explain that you'd like to help but you're not in a position to.

fairgroundsnack · 06/06/2014 12:01

I wouldn't do it as an investment. But if you do decide to go ahead, please make sure you take independent legal and tax advice on how it is set up. Would you be earning any income on the money you invested (ie 'rent' from your PILs on the portion of the house you owned) or just looking at the capital gain? You might want to consider some 'rent' being payable even if it is rolled up and left as a debt until the house is sold. You should certainly ensure that the house would be in your/BH and BIL/SIL names as well as your PILs. Note that you would be liable for CGT on any gain you made as it wouldn't be your principal private residence.

everyusernameiwantistaken · 06/06/2014 12:25

Oh balls to that then!

Also, I understand when posters say "it's about more than money" but financial arrangements like this can tear families apart and has to be a massive consideration.

Original poster
Plateofcrumbs · 06/06/2014 12:27

One thing that occurred to me was what would happen if either of the PILs ended up needing residential care -would the home potentially need to be sold to pay care fees? How would the shared ownership be taken into consideration and would DH/BILs "investment" be at risk of being gobbled up paying for a care home?

Again not saying that we wouldn't want to contribute to PILs care costs if it came to that, just what needs to be taken into consideration if this were thought of as an "investment"

OP posts:
glasgowstevenagain · 06/06/2014 12:27

If you want a good investement, buy a 2 bedroom flat in a student town or city centre and rent it out - then its yours to sell when you want!

dietcokefan · 06/06/2014 12:28

Why do they need a three bed house? And would they pay you any rent?

Shewhowines · 06/06/2014 12:31

There would be no return on this investment. You would be relying on capital gains.
Why not buy a smaller "buy to let" and use that income to help fund their rent. That way you are independant of the other two parties and hopefully will have capital gains too.

Shewhowines · 06/06/2014 12:32

short term return

WooWooOwl · 06/06/2014 12:32

I'm really interested to hear what makes your DH and BIL think it's a good investment.

Original poster
Plateofcrumbs · 06/06/2014 12:36

They clearly don't need a three bed house - not only that it's potentially unsuitable as a long term home as they get older and find it harder to manage stairs, upkeep of a larger property etc.

I think this has come out of a "oooh we could buy the house next door as an investment and PILs could live in it!" moment of thinking by DH/BIL.

OP posts:
glasgowstevenagain · 06/06/2014 12:36

Regarding care issues.

If you must then DH1 and DH2 (not PIL) buy it jointly with an equal deposit and a joint mortgage where they are both jointly responsible for the paying of the mortgage.

PIL sell current house and give that to DS1 DS2 DIL 1 and DIL 2 equally over a number of years.....(to avoid tax issues)

etc

complex and messy though

diddl · 06/06/2014 12:39

I'd probably think more in line of a one off payment towards a property that they can afford.

Original poster
Plateofcrumbs · 06/06/2014 12:39

I'm really interested to hear what makes your DH and BIL think it's a good investment.

Me too Grin

I don't want to make this sound like a more considered idea than it actually is, I think we have collectively spent more time thinking about it than DH and BIL have! But I am worried that it has the potential to run away with itself and if it is (as I strongly suspect) a bad idea then better to kill it off early before everyone starts getting overexcited.

OP posts:
Original poster
Plateofcrumbs · 06/06/2014 12:42

I'd probably think more in line of a one off payment towards a property that they can afford.

Yes me too - it's not just about the sum of money concerned, substantial though it is, it's about getting embroiled in a knotty financial situation with family members.

OP posts:
1stMrsF · 06/06/2014 12:45

The main reason why I wouldn't do this is the tying up of your savings at this stage in your life.

6 years ago, DH and I would have described ourselves as you did as comfortably off, with savings and options. I went on maternity leave, DH got made redundant unexpectedly, I decided not to go back to work as we had originally planned, life is very different. We have been fine, we've spent a lot of our savings, DH has worked a bit, I now work ft and he is the SAHP, we are now selling our house to buy a smaller one and refit our lives. All this time, we've had options and I've been very glad of it.

1stMrsF · 06/06/2014 12:47

Oh and I wouldn't get involved in any financial agreement with my ILs for any reason at all!

Viviennemary · 06/06/2014 12:48

No I don't think this is a good idea at all. People's circumstances change and you may decide you want the money back in a few years. I'm not against investing in property but not with other people especially relatives or friends. But no don't.

cozietoesie · 06/06/2014 12:52

Out of interest - how big a family has BIL got? (I'm trying to scotch the (unworthy) idea in my mind that, with a house which is substantially larger than the PILs need, he will shortly move in with them and dispose of his own.)

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