Hello I would appreciate if you could repost this. I am just after some advice or words of wisdom.
My mother sold the family home at the beginning of the year as the upkeep for such a large house was becoming too much for her. She bought a small villa unit in a great suburb but has struggled with downsizing from a 6 bedroom home to a 3 bedroom home (my 19 year old sister still lives at home). She recently decided to purchase a new house closer to the city in the hope of being able to rent out or sell her unit.
One month after buying the new house she has received bad news that her cancer has spread to her lungs and liver so there is no hope of her retuning to work and her doctor has told her it is unlikely that she will live another 10 years.
My partner and I have two children. We currently rent a 3 bedroom villa unit for $285 per week in a neighbouring suburb through a real estate agent. We love our house but it is built on a hill and there is no yard for the kids to play. My mum has said that we could rent her unit for $300 per week and she would also pay off in cAsh the outstanding amount on my husbands loan which is $11,000 if he was to sign a two year lease for $800 per fortnight. $300 per week rent plus $100 per week on the loan repayment. This would mean he could repay his loan in two years. It seems like a deal which would benefit us all. My mum won't have the stress of having to sell her house, we will live in a better suburb within walking distance of shops and the beach and my husband will save thousands in interest repayments. She proposed to have a lease written up for 24 months which states that we pay $400 per week so that if he was to falter on the repayments she would be covered. But is it ever a good idea to rent from family?
5 Replies
I don't think it as a good idea at all. I know a number of friends who have done similar and it ended in tears.
Firstly your mum needs to factor in expenses of repairs to the house, as she will still legally be responsible for things like the hot water system going. Also if your mum has higher standards as to neatness etc if she is visiting she will probably feel free to comment on weeds in the garden, floors not spotless etc.
I wouldn't go there at all unless it was done through a rental agent and I was paying market rent and the loan situation was kept out of it. These things have a way if going bad!
It depends on the family! My husband and i bought a house but then had to move towns due to his work. My parents and brother have moved in and honestly, it is a really good position for us. Financially, we have guaranteed rent each week, and don't have to pay a realestate agents fees, rental insurance, and all the other fees associated with having a rental property. We take care of the maintenance (although handy dad does it sometimes without telling us to not stress us, bless him!). We have no contract in place, but i trust them unequivocaly, but i do make sure they agree to not having pets. even though they arent as ocd clean as we are, i trust that they have respect for me and our property and it has worked very well for us for over a year now! so yes, it can work and be a very very good thing! As long as your mum understand the boundaries that you both set in place (as in just cause its her place doesnt mean she can rock up whenever) as well as discuss maintenance, who takes care of what etc and never faulter on the repayments and loan, there is no reason that you cant all respectively reach an excellent agreement. Its not cheap having a rental property, and you being in it will probably help relieve a lot of stress for your mum! good luck!
Nooooo it is not something I would ever recommend. We're currently renting from family and it's crap. My in-laws think they can turn up whenever they want, they nit pick everything, nag us about everything, if something needs to be done to the house we have to call around for quotes and deal with it all despite the fact my husband and I are VERY busy with work (70+ hours a week) and children and they don't understand why we can't do it all.
HOWEVER in saying that, we moved in for a reason and it's done the job and we just look forward to when we can afford to move into a new place. I think as long as you prepare yourself for the fact it could turn sour and be harder than you imagine and look at it as a short term solution then you'll be fine.
Good luck!
A few years back we moved to the Gold Coast and struggled to find a place suitable for our 18 month old and baby on the way, so my parents bought an investment property for us to live in. We had no problems whatsoever. At the same time, my parents did not give us a time frame in which we had to stay. There was no lease agreement, we paid $100 less than what every other unit in the complex was getting in rent and we could do whatever we wanted to the place ie. Paint, hang things, install fans etc. without the hassle of going through real estate or a landlord. Some comments above state that the in-laws or parents nit picked at anything and everything but mine didnt. Not once. They were better than I could have ever imagined! At the same time, it depends on the person. If your Mum is the type to hold this over your head, I would strongly recommend against it. Her writing up a lease agreement rang alarm bells for me. You're family. In my opinion, that is unnecessary. At the end of the day, you know her. Go with your gut. Good luck!
this sounds like a great idea, but make sure you have everything in writing and also think about if things might progress faster with your mums cancer and she might need to sell the house to release funds. What if you had another child and needed to get a bigger place or had to move out because of work and couldn't go to the end of the lease (maybe have a penalty $ in case you have to pull out of lease) . just put it all in writing. it could be great for both parties just think it all out :)