Buying housing for in-laws

[Anonymous]

In-laws rent, spend around 2k/mo. They are paycheck to paycheck, both working, zero savings or retirement beyond SS. Do you think it could be a good move to buy a place we can easily afford (a cheap 2 bedroom somewhere safe), and then they can pay us rent (not necessarily the full cost)? I worry about their ability to maintain housing once they cannot work, and don't want to be on the hook for finding them a place, scrambling, helping pay rent and basically wasting all this money. My thinking is that if we buy them a place (which would be our property, not theirs) at least it is an investment we can control.

[Anonymous]

I think it's a good idea, but caution it should be approached carefully with a lot of respect toward them so they aren't embarrassed and won't accept it. Also, they may be very particular about neighborhood. It's difficult to leave their known community like churches and stores and their everyday interactions, and those preferences should be respected, too.

Collecting rent might also be a sticking point.

[Anonymous]

The property is only investment in your head.
You gave no numbers to show your math.
$2k for 2-bedroom is great price.
If they are both renting and living paycheck to paycheck, why do they need a 2-bedroom?
Paying rent is not wasting money.

[Anonymous]

I have a hard time seeing why it would be an investment because housing returns are very low compared to stock market returns, so you're essentially losing money.

That said, I think you should do it if you have the money to help. We're doing something similar for our in laws so they can live a nice life.

[Anonymous]

Anonymous wrote:The property is only investment in your head.
You gave no numbers to show your math.
$2k for 2-bedroom is great price.
If they are both renting and living paycheck to paycheck, why do they need a 2-bedroom?
Paying rent is not wasting money.

The 2k is for a tiny 1 bedroom. It is the most they have ever paid and they have had to move 5 times in 15 years (sold their house and all that money is gone). They lose money each time on movers, have had to ask for help for first and last month rent...It is not a stable situation, and anxiety falls on us each time as well. I would prefer buying a 2 bedroom so we can stay with them if needed (we're not local) and they have somewhere to stay for good.

[Anonymous]

As long as you are okay with them missing all rent payments and trashing the place, I think it's a reasonable idea. I'm not saying they will, but this is definitely a foreseeable point of animosity if things go south. If you are prepared to accept the worst possible outcome and still want to do it then it shouldn't be a problem, as they will very likely exceed those expectations.

[Anonymous]

My sister did this for my parents, largely because they needed to downsize and didn’t have down payment money until their old house sold. But it’s been a good investment for them. They do go out pretty frequently to manage upkeep on the place, etc. I think the one thing to think about is whether there’s an anticipated end date here — like it might help if yo said this is a 5 year plan or 10 year plan. You can always extend it but you might not want to have them there when they are 85 and can’t really live alone — saying “oh well we did always say we would need to sell the house in 2035” might be a gracious way of moving them to a higher level of care, rather than just evicting them.

[Anonymous]

Sure why not? People do this for their kids, why not for poor in laws too?

[Anonymous]

We have done this for my mother in law, except we have no expectation of rent. We were already helping her pay rent, and the economics of buying in her area made more sense. We don’t view the house as an investment, but it has appreciated. Mostly, it gives us (and her) piece of mind to know her housing costs are set and will not rise. She uses her SS for her other expenses.

[Anonymous]

Don’t ask for rent money.

[Anonymous]

You're on the hook for maintaining YOUR investment. It needs to have good resale value down the road, so you need to do your due diligence before you buy. Public transport options and good public schools are the two major criteria for housing to keep its value over time. It should also be handicap-accessible as much as possible.

Also, what's the plan for when they need help? Medicare home? Who is paying for an aide at home?

Just be reasonable about how much you can take on, and what additional costs may happen down the road.

[Anonymous]

You could but if they are getting to the point where they may need assisted living soon, you're better off saving your money for that.

We've owned my inlaws house for 15 years now. They used to pay rent, but that stopped only a couple of years into the arrangement. Now they just live there for free and used the extra money to shop and pay golf.

[Anonymous]

Anonymous wrote:In-laws rent, spend around 2k/mo. They are paycheck to paycheck, both working, zero savings or retirement beyond SS. Do you think it could be a good move to buy a place we can easily afford (a cheap 2 bedroom somewhere safe), and then they can pay us rent (not necessarily the full cost)? I worry about their ability to maintain housing once they cannot work, and don't want to be on the hook for finding them a place, scrambling, helping pay rent and basically wasting all this money. My thinking is that if we buy them a place (which would be our property, not theirs) at least it is an investment we can control.

Absolutely! Collect the rent and claim deductions for tax purposes. Bank the rent in a separate account so you can use it for their benefit down the road..most of it at least. They will also feel like they are contributing if you collect rent vs let them live free.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In-laws rent, spend around 2k/mo. They are paycheck to paycheck, both working, zero savings or retirement beyond SS. Do you think it could be a good move to buy a place we can easily afford (a cheap 2 bedroom somewhere safe), and then they can pay us rent (not necessarily the full cost)? I worry about their ability to maintain housing once they cannot work, and don't want to be on the hook for finding them a place, scrambling, helping pay rent and basically wasting all this money. My thinking is that if we buy them a place (which would be our property, not theirs) at least it is an investment we can control.

Absolutely! Collect the rent and claim deductions for tax purposes. Bank the rent in a separate account so you can use it for their benefit down the road..most of it at least. They will also feel like they are contributing if you collect rent vs let them live free.

This is not how it works. Have you ever been a landlord??

[Anonymous]

Anonymous wrote:In-laws rent, spend around 2k/mo. They are paycheck to paycheck, both working, zero savings or retirement beyond SS. Do you think it could be a good move to buy a place we can easily afford (a cheap 2 bedroom somewhere safe), and then they can pay us rent (not necessarily the full cost)? I worry about their ability to maintain housing once they cannot work, and don't want to be on the hook for finding them a place, scrambling, helping pay rent and basically wasting all this money. My thinking is that if we buy them a place (which would be our property, not theirs) at least it is an investment we can control.

Yes - I think this is a very generous thing that you can do on behalf of your in-laws. I would either help them with the down payment to buy the place outright or buy the place on their behalf and collect rent. You will not get the tax shield the PP is suggesting - it does not work like that. That said, there is quite a gap between renting vs. owning so the math may not pencil out to make their current $2K expenditure possible.