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Original poster

Renting to parents wwyd

26 replies

audley · 30/11/2012 12:39

Hi, my dh has a house he rents. We have had the same tenant for five years and she is great.
My mum and step dad need to downsize considerably to get rid of any mortgage as my mum needs to give up work due to ill health. We have stumbled on the idea of them renting dh's house. They would feel secure that they could stay for life and all their assets would be available to use.

Dh does want to keep the house for ds2 to inherit, and he is only 2!
Great plan, or mental?

OP posts:

wisecamel · 30/11/2012 12:47

You currently have a good tenant. Your parents are presumably looking to buy when they downsize, so they keep the security of a smaller property with no mortgage.

I wouldn't, sorry. Just too many opportunities for it all to go horribly wrong.

lalalonglegs · 30/11/2012 12:55

I agree with camel. How would you feel about telling your parents that you are hiking up the rent or what would happen if they split up and neither wanted to move out? Have you mentioned your plan to them because if you haven't, I would keep very quiet about it.

Original poster

audley · 30/11/2012 13:20

Mmm, well, I mentioned it to my mum thinking step dad would never consider it as he has rather aspiration all tastes, and this is only a little 1970s semi. How wrong was I...they are very keen indeed!

OP posts:

Original poster

audley · 30/11/2012 13:21

Oh, I seem to have made up a word?

OP posts:

OldLadyKnowsNothing · 30/11/2012 13:23

How are they going to pay rent if they can't afford to pay a mortgage? They may not get housing benefit if they have capital from the sale of the house.

MoreBeta · 30/11/2012 13:30

Bad idea.

Your parents wil not be able to afford rent increases if inflation takes off. You could end up with what is effectively a sitting tennant paying a rent far below the market rate. They need to buy a retirement place they can afford and can manage to look after on their own.

It will cause resentment and as they get older may become a millstone round your neck.

Original poster

audley · 30/11/2012 14:19

Gosh, lots of negatives to think about...we only have a very small mortgage on the house and we are currently charging substantially below the market rate. We have not increased the rent in the five years since we first let it out. So we are not relying on it for an income as such. I don't think my mum and step dad will ever be entitled to benefits because of their work pensions so that is not an issue. My reasoning to go for it is I would rather they had a financially comfortable life and could look after their health rather than leaving an inheritance! My concerns are more to do with feeling a little suffocated by the intermingling of our lives and problems around getting things fixed to their standards and working out who would finance an extension, garage conversion etc!

OP posts:

lalalonglegs · 30/11/2012 14:53

Well, maybe enter into some sort of lease agreement where they take a lease on the property and are therefore responsible for repairs and they pay rent for however many years of lease upfront from proceeds of their house sale.

EIizaDay · 30/11/2012 15:10

Audley - I see the problems looming already with you wondering about an extension and garage conversion and who is going to pay for that.

It is your property. Why would your renters (parents) pay for that ?

oreocrumbs · 30/11/2012 15:19

It sounds like it would be complicated. Already the property would need to be amended a lot (extension and garage conversion) to suit their needs.

If you are to be their LL and the house is to remain entirely yours, then really you should fund that. In which case (I presume) you would have to re mortgage - or at the very least pile tens of thousands of your own money in. So in order to cover that the rent would have to go to at least market value if not more to keep your figures right.

You wouldn't expect a tenant to pay for those changes. A coat of paint yes, an extension no!

If they pay to do that then really they will be making an investment into the peoperty. I'm not sure how the land lies with that.

You could probably get a contract written up along the lines of they invest £30k into the property as part rent for x amount of years, and will therefore pay only a peppercorn rent in that time. To be honest I'm not very up on the legal side of things so hopefully someone else might have a better idea.

I also think that as well meaning as everyone is, things can and do go wrong.

Illness, divorce, financial problems do happen, and while God willing they won't to you, you can never guarantee that the house wouldn't have to go.

I can see why you want to help, but you really must think it through very carefully, because it already sounds complicated, and if it sounds complicated at the idea stage - it will be very complicated in practice!

OldLadyKnowsNothing · 30/11/2012 15:24

I'm a tenant. My tenancy agreement is that I am responsible for interior decor (I have really good, hands-off LLs) and they maintain the fabric of the building. If they want to fit new windows, or convert the garage or whatever, they do. If I want a new bathroom (which I do, but the house doesn't need it) it's tough luck. I don't suppose they'd mind if I paid for a new bathroom (as long as it was at least the quality of the current one) but I can't go and demand one.

Original poster

audley · 30/11/2012 16:04

yy all good points. I think they want to have a garden office which they would pay for, they like the idea of a garage conversion too, but I am not sure how that would work...

OP posts:

wisecamel · 30/11/2012 16:45

Would this garage conversion investment give them a share in the property? If they need social care later, would DH have to sell the house to release their portion of it?

It doesn't sound like they are familiar with being tenants. What if you turf out your good tenant, they do 6 months and then realise they really want their own place again?

OldLadyKnowsNothing · 30/11/2012 16:47

A garden office is just a shed, and so not a permanent construction; it could be removed fairly easily. But a garage conversion is a totally different thing, much more expensive and complicated to restore, should you wish to.

Also as a tenant, I'd be a bit narked at being evicted for the sake of people who don't even like the property as it is, especially after 5 years of faithful rent-paying. But that's not really a factor here.

Original poster

audley · 30/11/2012 17:17

Yes, garage conversion may have to go by the way.

They have been tenants in the forces, but not since.
I am dreading telling my current tenant, she is lovely and I admire her so much :0(

But, on the other hand, it is my mother I could be helping instead!

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ISeeSmallPeople · 30/11/2012 22:19

This reply has been deleted

Message withdrawn at poster's request.

wendybird77 · 01/12/2012 07:38

It sounds as if you are going to go ahead with it then. Please, please have a very frank discussion about the business side of things before they move in. You can even pose the hard questions to them and guage their response. What if you need to sell the house in the future, what if they run out of money, what happens if their relationship breaks down, what happens if they want a new bathroom / kitchen / garden shed, etc. What happens if you need to raise the rent? In fact, I would have the discussion and then put it in writing as people tend to forget what was said when things get tricky. If this conversation is uncomfortable, imagine how difficult it will be when something goes wrong. I'm not being morose, my mum's best friend moved into her spare room 'temporarily' and then moved her son into their other spare room! It isn't working out at all how my mum imagined it would and she is finding herself taking longer and longer holidays just to get away from her own house! It is going to make my mum miserable, is threatening their very long standing friendship and the friend has no where else to go and no motivation to sort it out as it is quite comfortable at mum's house. They didn't have the difficult discussion first and now my mum is bitterly regretting it. Best of luck with it, it could be fab as long as everyone is on the same page with it!

trumpton · 01/12/2012 07:58

DD and her DH live in a house we own . We are having it extended but to our plans and we will pay . They will then start to pay us rent based on the capital we have invested into the property .
They have been rent free up til now as SIL has been building a new business .
MIL moved to be near us and we have a 30% holding in her house ( all done legally ) .
I agree that every thing has to be written down . MIL in particular re-writes history to suit herself .

upinthehills · 01/12/2012 08:19

Is long term renting really best for your parents? In their position i would want to be rent and mortage free for life - only repair costs to account for.

Though, guess even for 20 years, if rent is say £500, that is a £120k spend for them so may be cheaper than buying a house - but there will no other asset there. If they invest the £120k in their own property, as a family, there are 2 properties instead of one.

A well insulated, cheap to run 2 bed house would be ideal imo!

Do your parents not want you to make the best of your assets - you renting your property massively below market value and them forking out rent every month just doesnt seem to make sense to.me.

ISeeSmallPeople · 01/12/2012 08:24

This reply has been deleted

Message withdrawn at poster's request.

Original poster

audley · 01/12/2012 13:56

Upinthehills, I agree that a nice little place they owned outright would be idea, but step father is very particular about what he is prepared to live in and where! He has been very reluctant to consider selling up at all and has his head in the clouds regarding their financial situation. Mum has worked longer than she should already give her health but she is keeping him in the style to which he is accustomed iykwim.

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Original poster

audley · 01/12/2012 13:56

He is an artist, exceptionally creative etc etc not at all pragmatic!

OP posts:

OldLadyKnowsNothing · 01/12/2012 23:50

If he's very particular about where he lives, he sounds like a nightmare tenant. Especially as you're related, so he'll feel more entitled to demand eg garage conversion! I really, really wouldn't.

MoreBeta · 03/12/2012 14:56

This sounds like it is going to be hell on earth.

Your Dad sounds very demanding and will expect to be kept in a certain style but will not be paying for it. He should be thinking about downsizing and clearly he will not despite his finances not being there to fund it,. This is the problem with so many people of their generation.

I really think they shoudl sell their house and purchase something like a retirement flat. By renting them your place you are just putting off the evil day they have to face up to their circiumstances.

Sorry but am having this conversation with may parents and MIL at the moment. Like banging my head against a brick wall.

MoreBeta · 03/12/2012 14:59

audley - to be frank, reading your posts I fear there is a certain amount of emotional blackmail going on here. Did your Mum suggest this to you as a solution because your Dad is so intransigent?

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