Considering buying a property for DS1 to live in

Flowerypillow · 2023-02-17T00:43:46+00:00

DS 1 is looking for a place to rent. He can afford the rent but the amount of money makes me shudder. I have some money that I really should invest somewhere. Enough to pay about half on a small flat in a nice ish area. I'd have to take a mortgage for the rest. The mortgage on my own house is paid up. I am *considering* buying a flat which I would rent to him for the cost of the mortgage plus maintenance charge, which would be considerably less than the market rent. Concerns: - what if he turns out to be a terrible tenant? - His GF would likely live there too - how will it feel for her to be living in a house "MIL" owns? - I have another son who currently doesn't need this help but may do on the future and if you do it for one... I do genuinely need to put my money somewhere and it seems to solve a problem, but I wonder if it's better to treat the two things separately and let DS pay market rent, even though I could save him a fair amount per month? Let him stand on his own so to speak. I think I'd be a decent landlord, which isn't guaranteed elsewhere, but I wouldn't like it if he doesn't respect the property. I don't think he'd wreck it but he might not take as much care as I would!

greenspaces4peace · 17/02/2023 01:03

not exactly the same but several work colleagues bought apartments in university cities (commuter zones) for when their dc attended. several still live in them. they all felt it was a reasonable retirement investment/plan.
i have two very close friends who actually own the homes their sons live in (for security reasons) due to past divorces.
keeps some of the ladies who might be interested in "free housing" at bay.

Rtmhwales · 17/02/2023 01:07

If gf is living there can you not charge them close to market rent, half each? His half to (hopefully) cover the mortgage and her half to invest in something so that if you needed to help the other child you'd have a small nest egg?

Original poster

Flowerypillow · 17/02/2023 01:08

keeps some of the ladies who might be interested in "free housing" at bay.

This is one of the reasons I'm not sure about the idea. It might protect some family money but it doesn't feel like a great basis for a relationship and I'm not sure that I should have that sort of involvement in their lives.

OP posts:

Original poster

Flowerypillow · 17/02/2023 01:09

Rtmhwales · 17/02/2023 01:07

If gf is living there can you not charge them close to market rent, half each? His half to (hopefully) cover the mortgage and her half to invest in something so that if you needed to help the other child you'd have a small nest egg?

I could, but why would I? The point is to save them some money? And what do they gain?

OP posts:

YesitsBess · 17/02/2023 01:13

I'm buying somewhere for my daughter and her friend to live in whilst at uni. Slightly different in that she is investing in the deposit and we have an agreement drawn up about who is entitled to what when/if its sold eventually.

You can get BTL mortgages for family members (slightly more hoops to jump through if I remember correctly) and if you want to be hands off I would recommend getting a property manager for the place rather than deal with it yourself to protect t you down the line if they turn out to be awful tenants or there are disagreements between them?

mondaytosunday · 17/02/2023 01:27

My son is moving into a property I own as the tenant of 9 years just gave notice. My son is 19 and has a minimum wage job, so couldn't really afford rent anyway. He will pay the utilities and the council tax will be in his name so he can claim the 25% discount. Should a girlfriend move in I'd expect her to pay something - half the regular rent pretty much. He's my son, any girlfriend isn't (or other flatmate) so I do not feel that I should be giving the girl a break - that's for their own parents to decide. I don't think it would be an issue that his mother owns the property.
As for my other child - her circumstances are completely different and she's had two more years of living at home and private schooling plus she will be going to university so I will be supporting her for some years yet. I don't keep an exact tally of what I'm spending on each of them but I support them both in any way I can. He is extremely grateful, and knows he is very lucky that he has a lovely home. My late husband worked very hard, as did my parents, and if it allows me to help them in this way I don't see why I shouldn't. As you can help your son, why wouldn't you?

greenspaces4peace · 17/02/2023 02:17

@Flowerypillow it doesn't stop a serious couple from making plans together.

greenspaces4peace · 17/02/2023 02:19

the benefit for your son is the potential for a long term rental with very little price increase, most likely a nicer area and bigger size unit than he could afford on his own.

tonystarksrighthand · 17/02/2023 02:19

mondaytosunday · 17/02/2023 01:27

My son is moving into a property I own as the tenant of 9 years just gave notice. My son is 19 and has a minimum wage job, so couldn't really afford rent anyway. He will pay the utilities and the council tax will be in his name so he can claim the 25% discount. Should a girlfriend move in I'd expect her to pay something - half the regular rent pretty much. He's my son, any girlfriend isn't (or other flatmate) so I do not feel that I should be giving the girl a break - that's for their own parents to decide. I don't think it would be an issue that his mother owns the property.
As for my other child - her circumstances are completely different and she's had two more years of living at home and private schooling plus she will be going to university so I will be supporting her for some years yet. I don't keep an exact tally of what I'm spending on each of them but I support them both in any way I can. He is extremely grateful, and knows he is very lucky that he has a lovely home. My late husband worked very hard, as did my parents, and if it allows me to help them in this way I don't see why I shouldn't. As you can help your son, why wouldn't you?

Totally agree. I feel the same and will do the same.

My parents did the same for me.

Rtmhwales · 17/02/2023 03:11

I could, but why would I? The point is to save them some money? And what do they gain?

Well, in theory your DS would be saving some money. Unless they're married I wouldn't be that motivated to save the girlfriend money. I just thought with her half you could put the money towards DS2 should he need help in the future. DS1 still benefits.

QueenCamilla · 17/02/2023 04:20

It would be very, very wrong to take rent from a girlfriend, unless she becomes an official and legal tenant (which also would be strange tbf).
So many ways I can think of, for that to go wrong.

Without a tenancy agreement: the girl would be living under the constant threat that any lover's spat, argument, misunderstanding = immediate bags on the pavement situation even though she's the one paying the rent.

With a tenancy agreement: what if they break up and she decides to stay to the end of the term and even beyond? So, so awkward.

I know it wasn't the OP but to posters wanting to charge rent to girlfriends - if you support your little Darlinks in life, I'm afraid that should include the sex life too!

QueenCamilla · 17/02/2023 04:28

I think it's good to educate sons that anyone staying for a period of time should contribute fairly to food and bills. And that includes couch-surfing weed head mates that he's more likely to acquire than long-term girlfriends! 😁

SeasonFinale · 17/02/2023 04:33

There are a couple of issues. A BTL mortgage usually does not allow you to rent to family. However if your mortgage is paid off you could raise the remainder by remortgaging your home.

Also you will (unless you don't have any income) need to pay tax on the rental income so you need to allow for rent charged to cover the mortgage, insurance, certificates, service charges and maintenance and rent.

SeasonFinale · 17/02/2023 04:33

Sorry last word should have been tax not rent.

mobear · 17/02/2023 07:39

Have you taken into account the tax position? Even if he’s your son and paying below market rate you’ll still be taxed on what he pays you as income.

TrinnySmith · 17/02/2023 07:44

Get a btl -put money from it into savings accts for each DCs. Give them the money in the future.

Sillyheadoooooo · 17/02/2023 07:45

Could you not buy a two bed so your other son has a room when he’s old enough? And also totally depends on the market in the area but if you could afford a two bed house, rather than flat it’s so much easier that faffing with leaseholds, service charges, enforced works - new windows etc etc

Original poster

Flowerypillow · 17/02/2023 07:48

QueenCamilla · 17/02/2023 04:28

I think it's good to educate sons that anyone staying for a period of time should contribute fairly to food and bills. And that includes couch-surfing weed head mates that he's more likely to acquire than long-term girlfriends! 😁

Food and bills yes, I'd expect them to sort that out between them, but charging more rent for the/same property because GF is living there seems/wrong.

OP posts:

Original poster

Flowerypillow · 17/02/2023 07:53

mobear · 17/02/2023 07:39

Have you taken into account the tax position? Even if he’s your son and paying below market rate you’ll still be taxed on what he pays you as income.

Only on the "profit" and there wouldn't any if he's only covering costs.

OP posts:

Changingplace · 17/02/2023 07:54

Could you put down the deposit and your son gets a mortgage for the rest rather than you doing that and renting back to him?

Or are you wanting to keep the investment in your name? I think if you did this you’d have to gift the deposit.

This way he’s getting himself on the property ladder, and you could do the same for your other son.

Original poster

Flowerypillow · 17/02/2023 07:59

Changingplace · 17/02/2023 07:54

Could you put down the deposit and your son gets a mortgage for the rest rather than you doing that and renting back to him?

Or are you wanting to keep the investment in your name? I think if you did this you’d have to gift the deposit.

This way he’s getting himself on the property ladder, and you could do the same for your other son.

Yes, I need the "investment" for my retirement.

OP posts:

Original poster

Flowerypillow · 17/02/2023 08:00

Sillyheadoooooo · 17/02/2023 07:45

Could you not buy a two bed so your other son has a room when he’s old enough? And also totally depends on the market in the area but if you could afford a two bed house, rather than flat it’s so much easier that faffing with leaseholds, service charges, enforced works - new windows etc etc

I don't think DS will ever come back to live in this area.

OP posts:

Original poster

Flowerypillow · 17/02/2023 08:00

I don't think DS will ever come back to live in this area.

Show quote history

DS2

OP posts:

TrinnySmith · 17/02/2023 08:08

I wouldn’t let to family.

mobear · 17/02/2023 08:26

@Flowerypillow I’m not an expert but that’s not how it works. She’ll have to pay tax on any money she receives in relation to the property, but will only have to pay 20% on the interest element of the mortgage which is some relief if she’s a high earner She can deduct service charges, etc from the tax owed but she’d still owe tax.

So for example if the mortgage was £400, £100 of which was interest, and she was in a 40% tax band, she’d pay 20% on the £100 and 40% on the £300 (so £140) bur she could deduct a £25 service charge from that, leaving her with a tax bill of £115 on overall outgoings of £425.