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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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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:

Dubjackeen · 06/06/2014 19:51

OP YANBU, far too much potential for issues ahead, and plenty of ways that money could be put to better use, for yourselves.
They don't need to buy the first house that seems to be an option, especially one that requires such investment by their family. Take the time to think this over, another cheaper house might be an option, but as other posters have said, only after taking proper legal advice, and considering all the pluses and minuses.

Randomeclectic · 06/06/2014 20:01

They need to downsize and not upsize. There must be other smaller retirement bungalows near BIL.

Kids are expensive - moving catchments, needing more bedrooms, weddings, uni fees, children's house deposits, one income, main breadwinner losing his job, long term illness can all effect. Put your money where you can get a return - so a buy to let.

IsItMeOr · 06/06/2014 21:39

Good point plate re problem of off-setting working in reverse. I hadn't realised they were retired yet. Had got a different impression from one of your earlier posts.

glasgowstevenagain · 09/06/2014 11:07

any update op

ComposHat · 09/06/2014 11:45

It seems a bad bet for everyone bar the parents.

You are restricted as to when you can cash in your asset. Which may be 30 years time and may not fit with paying for your children's university/husband's career change etc. Also the property market may then be in a slump when you come to sell. The time you realise your asset is arbitrarily decided for you

From your brother's point of view, it effectively ties him to the house he is living in now as the reason his parents will be living their is the proximity to him. Should he move, would they tag along behind him like camp followers? What if there are no suitable properties in the new area? I wonder if has thought through that living so close by will inevitably lead to him taking on a greater burden of caring for the elderly parents?

Why are they looking at larger houses than they can afford? Do they need a three bed house? Even with the investment of your husband and his brother, do they have the money to maintain, heat, light and pay council tax on a larger house than they need? If they can't keep up with maintenance it will have a negative impact on your investment.

At this stage in their lives would downsizing not be a more sensible option? Lots of people do it in retirement even if they have no imediate need for money. A ground floor flat may be ideal if they feel they may struggle with stairs in later years.

Johnogroats · 09/06/2014 12:06

Very bad idea for reasons articulated above.

My Father invested 100k in a London flat owned by my brother (well initially jointly owned by DF and DB). For various reasons, 10 years later my Dad has had to wave good bye to the money, and now could really do with it. I can't blame my brother for this (more his STBXW) but it is a very difficult situation.

I am in a slightly similar postion to you OP - we are very comfortable at the moment, and could theoretically assist DF and/or DB, but things can change.... DH is currently between jobs, and our savings are ok, but unless he gets a job fairly soon, that will change. We have paid down our mortgage substantially, and so outgoings are (relatively) limited. We may want to privately educated our kids...not sure at the moment, but I don't want to fetter our discretion for the future.

Stay well away from this plan!

Fizzyplonk · 09/06/2014 12:58

Wonder if BIL has considered knocking them through in the future to create 1 big house...

Original poster

Plateofcrumbs · 09/06/2014 13:21

Nothing new to report - this may well be one of those ideas that just raises its head then fizzles and dies - let's hope so!

OP posts:

mummymeister · 09/06/2014 15:28

can I just be the bringer of doom for a minute OP? we have faced a scenario like this. never, ever even consider it please. imagine MIL dies and FIL takes up with new partner and moves her in. FIL dies you cannot just move new partner out, she will have become a tenant. fast forward 20 years. BIL has done a lot of the fiddling about maintenance and gardening. in his eyes he is due a greater share of the house then you are because of this. finally, and I really don't mean to upset you, sometimes things aren't straight forward when you have kids and there are problems with their health etc. you might actually need your nest egg in ways you cannot even imagine at the moment. getting tied into joint family arrangements over finances is never going to end happily. what if BIL and SIL divorce and she claims her share of her ex husbands third.

ComposHat · 09/06/2014 15:36

I agree meister this arrangement would only work if everything stays as it is at the current time forever and no one moves, looses their job, divorces, remarries or has any other life changing event happen to them.

Which is hugely unlikely.

SelectAUserName · 09/06/2014 16:25

OP, I think it would be a good idea to go slowly back through this thread and write down a list of all the questions it has raised, so that if it hasn't completely fizzled out and someone does raise it again, you're prepared. You could then go through the list asking "what about X?" and "what would happen if Y happened?" and force them to think beyond "oooh, we might make some money from property".

expatinscotland · 09/06/2014 16:27

NO, NO and NO again.

TreadSoftlyOnMyDreams · 09/06/2014 16:45

To purchase a large family property for two ageing people?
It will require adaptation as they get older
Someone will have to bear the cost/workload of the household maintenance
The govt may well change property tax structures. Current council tax is no guarantee.
Energy costs are continuing to rise
It's in an area where property is cheap, therefore the actual investment potential is much much lower than London for example.
Accessing care when they have property assets may become more difficult in the future.

Nice idea but I'd veto it on the property alone. It sounds totally unsuitable.

mimishimmi · 10/06/2014 02:16

I would be very careful and make sure that everything, particularly your share should the house be sold, is in writing and approved of by your solicitors. Presumably if they move closer to your BiL he will be providing the bulk of any care in their declining years and he could very well say you are not entitled to any share from the proceeds of the house due to that. As an investment, yes, if held for the long term (eg if your PiL have a good 20 years left) it could potentially be a good investment.

FixItUpChappie · 10/06/2014 03:53

If your just starting your family then your entering the most expensive period of your lives. I wouldn't tie up all my savings and leave my nuclear family with limited options over such a scheme.

I can't see how its a good investment but can see any number of ways it could all go quickly pear shaped.

Your PIL should be looking to downsize and find something within their means that is sustainable for them with minimal financial assistance if any. that doesn't mean your not a familial support in other ways but the financial piece is a nightmare...best to not set up a scenario you would have trouble untangling from with your relationship in tact.

Rainbunny · 10/06/2014 18:38

The only time to "invest" money in a commingled family arrangement is if you are prepared to never see the money again. Do it if you think you could live with never getting the invest back or only a smaller portion of it but if you think you will need to use that money at some point, this is a bad investment risk. Even if you have the nicest family in the world, 3 different investors will have 3 different needs/life events etc...

iamsoannoyed · 10/06/2014 20:30

I don't think it's necessarily a good investment, and I think you could be doing more sensible things with your savings. You are also about to embark on a new phase of your life- an expensive one at that! Now is probably not the best time to be tying up your savings in this way.

In addition to the above, I think it's a bad idea to mix family and money in this way- far too fraught with potential for family conflict and bad feeling. For example, what if you or BIL needed the money for some reason? The only way to get your money out would be to make your PIL homeless. Would there be a mortgage (as opposed to buying house for cash)? If there is a mortgage, will you and Dh be responsible for 1/3? What happens if PIL unable to meet the mortgage costs?

There are also practical reasons it's not sensible. Who would be responsible for maintenance? Would you be expected to pay for 1/3? Can your PIL afford to run a larger house- and is it really the most suitable home for them in the future, as opposed to conveniently located to your BIL?

The bottom line is they can't afford to buy this house. They need to look at houses they can afford in a suitable location.

Gryffindor · 10/06/2014 21:10

Don't go near this.

If there is a mortgage on the property (i.e. BIL's share) then the mortgage will have first priority over any other parties. If BIL fails to pay the mortgage it will be repossessed and the Bank's priority will be making their money back via a quick sale. Any excess would go to you and ILs but it would be unlikely to be enough to cover your outlay.

ManWithNoName · 10/06/2014 21:20

Personally I think PILs should just sell their home and move into a small sheltered accommodation flat. Much better for them to be in a sheltered for the long term - especially if one of them dies. Selling now gets rid of a headache for the future when they are really old or ill. We begged PILs to move into sheltered but FIL would not hear of it now MIL is alone in that house and finding stairs more and more difficult.

You might want to help them decorate and repair the cottage ready for sale then get the money back once they sell but nothing more.

TBH sounds like they have lived beyond their means and could not afford to live in the cottage for quite a while. Is it possible they have actually borrowed against the cottage and have no equity at all?

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