Buying MILs holiday home.

[strengthinnumber]

My MIL has owned a holiday home for over 30 years. She was an accidental landlord under strange circumstances and apparently nearly sold it a couple of times in the early years, but ended up keeping it and renting it out either as a family home or latterly as a holiday let.

Because of where it is it's now worth a lot of money (3 beds, parking, garden,10 mins walking distance to lovely seaside town and beach.) We've always holidayed there with her at least once a year as have my DH's siblings.

Some background. DH doesn't really like the place due to bad memories. His siblings either pretend the bad memories aren't a thing (SIL) or actively revel in being in the place and happy as a kind of giant fuck you to the person who MIL inherited from (BIL). Anyway there was a bit of drama with the house over the summer which apparently made MIL think, and she's decided to sell the house. But she wants DH and his siblings to buy it.

She's offering it to us for less than the market price (but an amount that won't be queried for IHT purposes. SIL works in this field and it's legal and watertight). This is still a comfortable 6 figure sum from each of us though.

I think it's a no brainer. Rental income is stellar and we would be getting a great asset at a fantastic price. The kids love it and we've had fabulous holidays there.

BIL and SIL are on board as well. However DH is flatly refusing. His reasons: he still feels uncomfortable in the house. He'd have to be in business with his brother and sister who (in fairness) are a bit much. He worries his mum will miss the income. We'd have to use most of our savings to buy it.

Basically I think he's digging his heels in because he doesn't want to own it because he doesn't like it. And I get it. But hey- if necessary we never have to go there again. It's still daft to turn down the opportunity to purchase it. It would provide a better pension for us in later life and help fund the kids through university. I'm very frustrated as he's letting his feelings about the place make him miss out on a very sensible financial opportunity.

Now MIL has approached me directly and asked if I'd like to buy DHs share (she wants her grandchildren to benefit). I have some personal investments I could sell plus technically half the savings are mine (we've contributed equally over the years).

Would IBTA if I did this. Mil seems to think DH won't mind and that in fact he'd be happy eventually to gave the decision taken out of his hands.

@Mayorquimby2

I'd feel completely betrayed in his position even with you being completely upfront about it.

As would I. Some things are more important than money.

[quote Offmyfence]@Badbadbunny

Do use this link....

www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/summary?csrfToken=4295c8ad21179ea608cf356979301f3d5b6c2c28-1636052591324-09435898d5828eaf3554b1a2[/quote]
Thank you. There's a lot of financially very literate people in this app. We are all in law, finance or associated professions and please trust us this has been scrutinised. I've not given real or exact figures just tried to give a ballpark sense of what we are looking at.

Would be run as a business by agents. Usual one week per year offered to siblings.

How will you decide who gets what week?
What if two siblings want the same week?

Can your BIL, SIL and you (presumably individually as your DH wants no part) easily afford repairs?
Can your siblings in law stand up to their mother if you have a differing opinion to her?
How many weeks will MIL get to use it?

What do your BIL & SIL's partners/spouses think of the idea?

@ChicCroissant

No. It's a bad idea. But your DH's feelings about it don't seem to matter to you, and they didn't the last time you raised this on here as well.

And yes, no matter what the money involved is my DH's feelings would matter more to me so I wouldn't do it. I wouldn't go against his wishes on this.

I thought this seemed oddly familiar.

I would never ever agree to jointly own an asset with anyone but DH. Especially not with my siblings. And I’d be absolutely ice cold furious if DH ever did to me what you are proposing to do - all of our money, savings and assets are ours and we jointly agree how they are used. Especially if it involved making joint commitments with people who are related to one of us and “a bit much”.

I’d value my marriage and my DH being comfortable than an opportunity to potentially make money, however lucrative you think it might be.

Thank you. There's a lot of financially very literate people in this app. We are all in law, finance or associated professions and please trust us this has been scrutinised. I've not given real or exact figures just tried to give a ballpark sense of what we are looking at.

And you nor your SIL are! So why are you entering into something you don't understand? Coz you think you're going to get loadsamoney!!!

What would happen if you DON'T? Would the other two still go halves and you'd be missing out on a huge amount or would the property just be sold and you'll all have thirds on proceeds? Or if the property was sold would MIL have the proceeds which I assume at a later date would go to the three siblings?

"Why would your MiL be giving away £300k?
Is she so wants to give each sibling £100k, she could sell up & give them cash."*
*
The house has been used as a holiday home by the family for the best part of 30 years (including DH who comes reasonably willingly and loves to sail!) Grandchildren adore it.

I think MIL is hoping this would continue.

I wouldn’t, sounds like hard work. I’d prefer to take my 6 figures and invest in a holiday let somewhere else, where you can make happy memories and not have to deal with being in business with family. Keep it clean.

I have been involved in a similar shared business, from a purely financial point of view you may not make as much as you would expect.
Apart from the school holidays the weekly rent may not be high. In winter it was often empty and if it was occupied the cost of heating and cleaning would eat up most of the income. We paid nearly a thousand pound a year in insurance.
There can also be problems if one person wants to for instance replace the kitchen and the others don't. Our property was quite old and needed a lot of maintenance.
I get on really well with the person I shared my holiday let with but I still wouldn't do it again.

I think given that your DH doesn't get on particularly well with his siblings, and you have even said they are a bit much, this isn't a good idea. You may very well get a few years in and think no amount of money is worth the aggro. Only you know how difficult they are.

Bottom line for me is, if your DH still isn't on board despite the sound financial investment, then I wouldn't go ahead. It will cause problems.

Don’t do it. Use this as a starting point to make other plans together.

Regardless of you DH reasons I wouldn't do it as the future is fraught with legal and emotional arguments in following situations.

1. Who pays what share for upkeep, who manages the property.
2. Tax on income, is it run as a business.
3. If one party wants to cash in their share and the others don't or can't afford to buy out.
4. One of the party divorces partner and then has to give 1/2 share value of their holding.
5. One of party dies and their share is then split with children and reasons 3,4 become more complex.
6. Next generation inherit smaller shares of property and it becomes more complex to manage and agree.

I would cash out and invest on my own personally, being financially entwined with siblings and their spouses is never going to be easy.

Ignoring your husband's feelings, joint ownership of this type of property is really fraught with drama. Stumping up for major repairs, what to do when someone wants out, etc. Mixing business with family rarely ends well.

MY OH in a similar position but with an inherited property. Absolutely no way he can manage something like that as a business with his brother (they don’t even clean when they visit and pretend DP is trying to over charge them when he asks them to share expenses for items that need replacing and bills and also, they always want to spend a few weeks in it on the peak 4 weeks of the year when most of the income would come from.

On top of that, it may have been an amazing year for AirBnBs during Covid but with abroad holidays back in swing, I don’t think it would be as profitable in the next years as it would have been previously. In fact, many holiday let’s are now for sale in my area.

But in your case, it is not only the financial cost of getting into this deal what you should be considering also the damage to your relationship if you go ahead with it when your husband opposes the move so strongly.

@strengthinnumber

"Why would your MiL be giving away £300k? Is she so wants to give each sibling £100k, she could sell up & give them cash."* * The house has been used as a holiday home by the family for the best part of 30 years (including DH who comes reasonably willingly and loves to sail!) Grandchildren adore it. I think MIL is hoping this would continue.

That's a massive CGT bill when she sells! Love the fact that she thinks selling it cheap would avoid that.. gotta love a tax dodger haven't you? I find that most tax dodgers are the same people moaning about people on benefits!

Disgraceful!

If she wants to sell it, sell it at market rate and pay the tax due.

And SIL is whiter than white.,... my fucking arse.

You said there was no abuse involved. Abuse isn’t just physical. It incorporates emotional abuse and coercive control. It sounds as if this was there in bucket loads. Your bil and sil have their take on how to deal with what happened to them. Your dh has another. I’m imagining that your dh is the quieter, more reserved sibling and this is reflected in his reaction. I get 100k is not to be sniffed at. However, your dh ‘s boundaries need to be protected first and foremost.

If the person he hated spending summers with was an absent, awful father, it would be pretty mean to not care about the deep seated trauma he is trying to process by saying "No, I can't be a part of that purchase." Just because he wasn't physically abused there doesn't mean there isn't a deep trauma related to a place. And now you think a bit of investment income should make him feel better about it?

He was forced to go there, and I would feel you had "forced" me into remaining connected to it no matter how you packaged it.

@Confrontayshunme

If the person he hated spending summers with was an absent, awful father, it would be pretty mean to not care about the deep seated trauma he is trying to process by saying "No, I can't be a part of that purchase." Just because he wasn't physically abused there doesn't mean there isn't a deep trauma related to a place. And now you think a bit of investment income should make him feel better about it?

He was forced to go there, and I would feel you had "forced" me into remaining connected to it no matter how you packaged it.

Apparently as OP got her arsed handed to her on a plate, it was downgraded to disliked!

How are you financing it and can you afford it without compromising your lifestyle?

You've said it will cost you six figures each to buy. You have this money. You are by any measure therefore wealthy, with investments on top of I assume your home, pensions, salary.

You don't need this income. You're not broke. This is icing on top of a pretty big cake for you. If you went ahead I suspect there would be an emotional cost further down the line and you don't need it.

You would be very unreasonable to buy setting that clearly holds bad memories for him that he still finds hurts him.
Drop it.

@MilduraS

If all three own it who would deal with the grunt work on the letting side? If you all want it for the same week who takes priority? If the bathroom needs renovating would everyone agree on a sensible budget or will someone keep insisting that the £200 taps they like are essential? Would any of them refuse to contribute to general upkeep that isn't necessarily "essential" but would improve ratings from guests?

This

V dangerous getting into business with people who you arent ‘in business’ with. If any of you have a holiday home company and lots of experience in the field then it is a bit more tempting, but renting a holiday home in a way that gives you a profit worth sharing between several families is something that takes knowledge, talent and some hard work.

You would need a watertight contract that covers the capital purchase but also maintenance, capital expenditures in the future (new roof etc) the work to run the place, the work to let the place, how to share it between you for personal holidays, how personal holidays impact the rental income (say one family always want it during high season and the other only has it off season, should the high season family take less of a share of the profit etc etc)

If you and the family arent all on the same page and have similar attitudes to risk, work, being polite to each other etc etc. I wouldnt touch it with a barge pole.

No, if my DH decided to invest his entire life savings in something that held bad memories for me and that I wanted no part of for very good reasons I would be considering divorce. The joint nature of the investment with members of his family makes the whole thing far worse too.

Aside from DH’s objections. I wouldn’t buy it purely because there are two other people involved.

What if you three fell out?

What if one fell on hard times?

What if one or two wanted to sell?