Buying a house in a town I don't live in
June 8, 2016 1:03 PM Subscribe
Buying a house near my aging parents when I don't live in their state. Is this a good idea?
I live in the midwest. My parents live in the south. They're in their 70s and 80s, and while in good health, I know I can't expect that streak to continue. I'm the only child and family member (no extended family). My parents won't be moving to my state (non-negotiable).
I foresee spending more and more time with them over the next 5-10 or more years. For me to do this sanely, I would like my own place near them, instead of staying in their home. (Trust me on this.) I have a flexible job, but a husband and active life here in the midwest, so my future plan would be to fly back and forth when possible, staying for extended periods of time. My husband and job are OK with this.
I'm wondering if it would be rational to buy a house in their town, near them, so I could have my own space when visiting. I have a mortgage here in the midwest, but have the income to sustain two mortgages (and housing prices in their small town are very low). I would likely sublease or AirBnB (or something similar) for the extended periods I'm not in the house. I would prefer this over renting so I could come and go on my own schedule. i would absolutely prefer this to staying with them.
Is this a good idea? I want to be near my parents as they age to take care of them, but I don't want to permanently move to their town or live with them. Having my own, separate space near them seems to be the best compromise, but I'm likely forgetting a thousand things. Can you talk me in or out of it?
I live in the midwest. My parents live in the south. They're in their 70s and 80s, and while in good health, I know I can't expect that streak to continue. I'm the only child and family member (no extended family). My parents won't be moving to my state (non-negotiable).
I foresee spending more and more time with them over the next 5-10 or more years. For me to do this sanely, I would like my own place near them, instead of staying in their home. (Trust me on this.) I have a flexible job, but a husband and active life here in the midwest, so my future plan would be to fly back and forth when possible, staying for extended periods of time. My husband and job are OK with this.
I'm wondering if it would be rational to buy a house in their town, near them, so I could have my own space when visiting. I have a mortgage here in the midwest, but have the income to sustain two mortgages (and housing prices in their small town are very low). I would likely sublease or AirBnB (or something similar) for the extended periods I'm not in the house. I would prefer this over renting so I could come and go on my own schedule. i would absolutely prefer this to staying with them.
Is this a good idea? I want to be near my parents as they age to take care of them, but I don't want to permanently move to their town or live with them. Having my own, separate space near them seems to be the best compromise, but I'm likely forgetting a thousand things. Can you talk me in or out of it?
This is a great idea. My parents are the same age as yours and we've just recently been blindsided by a huge medical issue that is sucking all of my time and mental energy. Problem is: they live a four and a half hour drive away and I have a full-time job and family here. Staying with them is crazy-making and staying in a hotel every time is expensive and kind of insults them, which is another level of crazy-making.
If I could swing getting a house down where they are and if my job was portable, I would so totally do this.
posted by cooker girl at 1:13 PM on June 8, 2016
If I could swing getting a house down where they are and if my job was portable, I would so totally do this.
posted by cooker girl at 1:13 PM on June 8, 2016
How does the math work out? Have you considered the math on the alternatives, such as an extended stay hotel? If they live in a small town with low housing costs, you may not be able to count on getting much income or reliable income from renting a house out for short periods, as this town would likely have few visitors.
posted by phoenixy at 1:13 PM on June 8, 2016 [16 favorites]
posted by phoenixy at 1:13 PM on June 8, 2016 [16 favorites]
How does the math work out? Have you considered the math on the alternatives, such as an extended stay hotel? If they live in a small town with low housing costs, you may not be able to count on getting much income or reliable income from renting a house out for short periods, as this town would likely have few visitors.
I think that's the key here. Is the sublet/AirBnB income integral to your being able to afford the home at all, or was it just a nice idea you had for maybe making a couple of bucks on the side since you won't be there full-time?
posted by tobascodagama at 1:16 PM on June 8, 2016 [16 favorites]
I think that's the key here. Is the sublet/AirBnB income integral to your being able to afford the home at all, or was it just a nice idea you had for maybe making a couple of bucks on the side since you won't be there full-time?
posted by tobascodagama at 1:16 PM on June 8, 2016 [16 favorites]
What are the prospects for housing prices there? Are you okay with not just the monthly payment but the opportunity cost of not investing that money e.g., in an index fund? ... If housing prices rise? ... If housing prices fall?
If it's a place with low housing prices, is there really demand for AirBnB or subletting? Are you really willing to deal with the hassle of renters? If it's an economically depressed part of the state, finding someone who actually pays the rent could be more challenging than in a booming economy.
posted by salvia at 1:16 PM on June 8, 2016 [8 favorites]
If it's a place with low housing prices, is there really demand for AirBnB or subletting? Are you really willing to deal with the hassle of renters? If it's an economically depressed part of the state, finding someone who actually pays the rent could be more challenging than in a booming economy.
posted by salvia at 1:16 PM on June 8, 2016 [8 favorites]
Are you an experienced landlord/AirBnBist? Do you have someone there who can slean and maintain the property between tenants? If you just don't get tenants for, let's say a year, what does that do to your budget?
Hotels (especially extended-stay and non-chain hotels) are willing to cut you deals on long-term and regular stays. Call around to Joe & Irma's Sleepytime Inn to see what kind of number they'll give you before you buy a house.
posted by Etrigan at 1:19 PM on June 8, 2016 [6 favorites]
Hotels (especially extended-stay and non-chain hotels) are willing to cut you deals on long-term and regular stays. Call around to Joe & Irma's Sleepytime Inn to see what kind of number they'll give you before you buy a house.
posted by Etrigan at 1:19 PM on June 8, 2016 [6 favorites]
This seems like a reasonable plan, but I'd price out some alternatives as well. Would it make more sense to buy a small apartment or condo (if available)? What about renting an apartment? One advantage of renting is that you'd still have your own space whenever you wanted, but wouldn't have to deal with maintenance or most unexpected expenses. (I see you wrote that you'd prefer to Air BnB over renting, but I think you mean that you'd rather list the place as an Air BnB than rent it out, not that you wouldn't consider being a renter.)
posted by insectosaurus at 1:25 PM on June 8, 2016 [2 favorites]
posted by insectosaurus at 1:25 PM on June 8, 2016 [2 favorites]
Why don't you try a year of doing VRBO/HOME AWAY/AIRBNB first so you can see how it goes? You can do this on your own schedule. Being a long-distance owner and possible Airbnb host is going to be a lot of work.
posted by Elsie at 1:35 PM on June 8, 2016 [4 favorites]
posted by Elsie at 1:35 PM on June 8, 2016 [4 favorites]
How is their real estate market? Not to be a bummer, but your parents will pass away someday and you'll be stuck owning two homes in the same small town. If the market is terrible that could be a big headache. My family had enough trouble selling my grandparents' crappy old house in a poor southern town; two would have driven my mom absolutely nuts.
posted by gatorae at 2:00 PM on June 8, 2016 [1 favorite]
posted by gatorae at 2:00 PM on June 8, 2016 [1 favorite]
Dealing with AirBnB, VRBO, etc. is a *thing.* It definitely takes energy. (My close family member manages a rental house that is right next door to the house they already live in. And between cleaning the property, dealing with any small fixes, dealing with the reservations, taking out the trash and bringing in the cans, etc. -- it's great but it takes some work.)
I think your idea of having a place there is great, but maybe you want to consider an apartment, so you can come and go as you please and there's a landlord to deal with any problems.
posted by BlahLaLa at 2:04 PM on June 8, 2016 [4 favorites]
I think your idea of having a place there is great, but maybe you want to consider an apartment, so you can come and go as you please and there's a landlord to deal with any problems.
posted by BlahLaLa at 2:04 PM on June 8, 2016 [4 favorites]
Do your parents have a big backyard? How are land prices? What about a nice big, cushy RV, provided you have a place to put it? It eliminates the "owning two homes in a small town" issue. And if you put it on its own lot with electricity and whatnot, you might even be able to Airbnb it?
posted by slateyness at 2:05 PM on June 8, 2016 [9 favorites]
posted by slateyness at 2:05 PM on June 8, 2016 [9 favorites]
If you had the cash to buy a house outright this might be a good idea, but I'm not sure if you should take on a second mortgage. What about finding an AirBnB in their town that you really like and seeing if the owner would be willing to give you a discount on long term stays after you've visited once or twice to show you're a good tenant?
posted by MsMolly at 2:08 PM on June 8, 2016
posted by MsMolly at 2:08 PM on June 8, 2016
The mention of a yard above raises a good point: will you be able to come down regularly to keep a yard trimmed? Or will that be an additional cost?
Also, did you figure the monthly garbage + water + sewer fee into your budget? Some municipalities (mine for instance) won't let you turn those off even when a place is vacant.
Try a rent vs. own calculator. I recently did (for a scenario that, frankly, sounds a bit better than this one) and was surprised. Closing costs, maintenance, and utilities made renting a better deal.
Then again, they say the thing with "personal finance" is to remember that the emphasis is on "personal." You may be more than happy to spend that extra $23k (to pick a number completely at random) to never ever have to discuss where you're staying. (You may, however, have to discuss that Martha was walking by the other day and said that it looked like your shutters were dirty and you really should powerwash the house... Or whatever.)
posted by salvia at 2:23 PM on June 8, 2016 [1 favorite]
Also, did you figure the monthly garbage + water + sewer fee into your budget? Some municipalities (mine for instance) won't let you turn those off even when a place is vacant.
Try a rent vs. own calculator. I recently did (for a scenario that, frankly, sounds a bit better than this one) and was surprised. Closing costs, maintenance, and utilities made renting a better deal.
Then again, they say the thing with "personal finance" is to remember that the emphasis is on "personal." You may be more than happy to spend that extra $23k (to pick a number completely at random) to never ever have to discuss where you're staying. (You may, however, have to discuss that Martha was walking by the other day and said that it looked like your shutters were dirty and you really should powerwash the house... Or whatever.)
posted by salvia at 2:23 PM on June 8, 2016 [1 favorite]
I'm going to be a little contrary and say this is *not* a good idea. Keeping up with a house is a lot, and with your parents aging you will find yourself taking care of three houses in two states eventually. It sounds like they don't live somewhere with a very robust real estate market, so you may end up underwater on the house and / or have trouble selling it. Even leasing somewhere year-round would probably make more sense, or a hotel.
You might also be overlooking transaction costs and the cost to furnish and insure an additional house. Especially with a 5-10 year time frame planned to own it the money situation is likely pretty unfavorable.
posted by ghharr at 2:23 PM on June 8, 2016 [12 favorites]
You might also be overlooking transaction costs and the cost to furnish and insure an additional house. Especially with a 5-10 year time frame planned to own it the money situation is likely pretty unfavorable.
posted by ghharr at 2:23 PM on June 8, 2016 [12 favorites]
I've considered something not entirely unlike this myself. There's a number of things you'd need to look at first (you don't need to answer these here, but you should consider them)
Is the AirBnB plan necessary to being able to afford the house? Is the AirBnB income necessary to afford to maintain the house? How does this look as an investment if the home values in the area drop? How much are taxes?
Be aware that mortgage rates on homes that are not owner occupied will be higher, as will insurance. Also consider the endgame of when you don't want to own this house any longer -- if you are underwater on it, what will you do? If homes stay on the market a long time there (common in small towns), what will you do? How will this affect your own retirement planning?
Unoccupied houses can have a number of issues come up, anything from crime to maintenance issues turning into major damage because no one noticed them. You'll want to have a plan for who can deal with things if there are any issues specific to this location, such as hurricanes or floods.
You'll also need someone(s) local you can hire to come in and clean up the house, be a local contact for guests (to give them keys or call about maintenance, you'd still be handling the bulk of the communications), alert you to any damage after rentals, manage repairs, maintain the yard, etc. Your aging parents are probably not a good choice for this, unless they have done that sort of thing before and really want to do it -- but even then, how will you feel if one of them gets injured falling from a ladder or something? If it's a small enough town finding a reliable person to handle things in your absence could be difficult, OTOH you might have a lot of contacts in the town and already have a few people in mind who could do these things. I think it's good to have two people, unless it's someone who never travels and is always available -- and you'd also like the two of them to be able to work well together, so that you don't have to manage which person is taking care of things.
Another issue that comes up in small towns is that if they are far from other places it can cost more for travel costs + travel time to get repair people out (a lot more -- think $150 per hour of travel time or more), or you might be very limited in your choices of who is available in the town or willing to travel there. If you are able to do your own repairs and maintenance, that can save some money, but you might be loosing rental income because your travel schedule keeps you from doing the repairs right away. It's also more difficult and time consuming to do basic repairs yourself if there is no place to buy supplies nearby.
sublease
Subleasing is something you do when you yourself are leasing, so you won't be doing that. Maybe you mean short term (such as week to week) rentals? I would never consider short term rentals in this situation without a site like AirBnB or a local property management company that specializes in vacation rentals being involved. If you want to rent this house out to a tenant for, say, three months, that might be doable but I would consider that to be more of a potential headache in many ways than AirBnB -- you really need to read and understand the real estate laws that apply to landlords and tenants in this state, as well as how they are applied in practice -- and by your use of the term sublease, it sounds like this is an unfamiliar area.
Also, I would not recommend the more traditional landlord route (same tenant for months at a time) if you are particularly emotionally attached to having the house be in good condition, vermin free, working plumbing, clean, etc. when you arrive for you own stay there. Many people are not able to emotionally deal with these things for their "home" that they aren't even ever planning to live in, even if the deposit covers all the cleaning and damage -- and you are planning on this being your own living space. Stop and imagine being worried about a parent's worsening health or hospitalization when you arrive, and then finding your living space has bags of garbage and a completely clogged sewer line (or worse). Or maybe your tenant has lied to you about moving out.
posted by yohko at 2:45 PM on June 8, 2016 [5 favorites]
Is the AirBnB plan necessary to being able to afford the house? Is the AirBnB income necessary to afford to maintain the house? How does this look as an investment if the home values in the area drop? How much are taxes?
Be aware that mortgage rates on homes that are not owner occupied will be higher, as will insurance. Also consider the endgame of when you don't want to own this house any longer -- if you are underwater on it, what will you do? If homes stay on the market a long time there (common in small towns), what will you do? How will this affect your own retirement planning?
Unoccupied houses can have a number of issues come up, anything from crime to maintenance issues turning into major damage because no one noticed them. You'll want to have a plan for who can deal with things if there are any issues specific to this location, such as hurricanes or floods.
You'll also need someone(s) local you can hire to come in and clean up the house, be a local contact for guests (to give them keys or call about maintenance, you'd still be handling the bulk of the communications), alert you to any damage after rentals, manage repairs, maintain the yard, etc. Your aging parents are probably not a good choice for this, unless they have done that sort of thing before and really want to do it -- but even then, how will you feel if one of them gets injured falling from a ladder or something? If it's a small enough town finding a reliable person to handle things in your absence could be difficult, OTOH you might have a lot of contacts in the town and already have a few people in mind who could do these things. I think it's good to have two people, unless it's someone who never travels and is always available -- and you'd also like the two of them to be able to work well together, so that you don't have to manage which person is taking care of things.
Another issue that comes up in small towns is that if they are far from other places it can cost more for travel costs + travel time to get repair people out (a lot more -- think $150 per hour of travel time or more), or you might be very limited in your choices of who is available in the town or willing to travel there. If you are able to do your own repairs and maintenance, that can save some money, but you might be loosing rental income because your travel schedule keeps you from doing the repairs right away. It's also more difficult and time consuming to do basic repairs yourself if there is no place to buy supplies nearby.
sublease
Subleasing is something you do when you yourself are leasing, so you won't be doing that. Maybe you mean short term (such as week to week) rentals? I would never consider short term rentals in this situation without a site like AirBnB or a local property management company that specializes in vacation rentals being involved. If you want to rent this house out to a tenant for, say, three months, that might be doable but I would consider that to be more of a potential headache in many ways than AirBnB -- you really need to read and understand the real estate laws that apply to landlords and tenants in this state, as well as how they are applied in practice -- and by your use of the term sublease, it sounds like this is an unfamiliar area.
Also, I would not recommend the more traditional landlord route (same tenant for months at a time) if you are particularly emotionally attached to having the house be in good condition, vermin free, working plumbing, clean, etc. when you arrive for you own stay there. Many people are not able to emotionally deal with these things for their "home" that they aren't even ever planning to live in, even if the deposit covers all the cleaning and damage -- and you are planning on this being your own living space. Stop and imagine being worried about a parent's worsening health or hospitalization when you arrive, and then finding your living space has bags of garbage and a completely clogged sewer line (or worse). Or maybe your tenant has lied to you about moving out.
posted by yohko at 2:45 PM on June 8, 2016 [5 favorites]
This is a great idea, and something to aspire to. Good on you.
For what it's worth, I bought the house I now live in when I lived in another city, several hundred miles away. It wasn't complicated (that's not to say it didn't cost me--I still had to come up to the place and to the local bank that helped me finance it). But people do this sort of thing all the time.
Good luck!
posted by late afternoon dreaming hotel at 4:09 PM on June 8, 2016
For what it's worth, I bought the house I now live in when I lived in another city, several hundred miles away. It wasn't complicated (that's not to say it didn't cost me--I still had to come up to the place and to the local bank that helped me finance it). But people do this sort of thing all the time.
Good luck!
posted by late afternoon dreaming hotel at 4:09 PM on June 8, 2016
Figure out what it would cost in total to pay mortgage, insurance, yard upkeep and furnishings over the course of a year. Divide by 12 and then rent a room elsewhere in the town for that much, with the expectation and blessing of landlord/housemate that you will not be there most of the time.
This seems like such a risky, expensive idea to me, especially if the housing market there is slow. Minimize your risk by renting a room. The only exception I could see is if there are really no good room/apartment rentals in their town.
posted by permiechickie at 5:08 PM on June 8, 2016 [1 favorite]
This seems like such a risky, expensive idea to me, especially if the housing market there is slow. Minimize your risk by renting a room. The only exception I could see is if there are really no good room/apartment rentals in their town.
posted by permiechickie at 5:08 PM on June 8, 2016 [1 favorite]
Forgot to mention, add 10% to the buy-house number to figure in buying/selling costs, which you would not recoup very well if, bad case scenario, you had to sell the house sooner than you were expecting.
posted by permiechickie at 5:09 PM on June 8, 2016 [1 favorite]
posted by permiechickie at 5:09 PM on June 8, 2016 [1 favorite]
Are there any duplexes, or houses with garage apartments in their area? If you bought something like that and rented one unit it would probably cover your mortgage.
posted by mareli at 5:39 PM on June 8, 2016
posted by mareli at 5:39 PM on June 8, 2016
You really have to run the numbers to know if it makes any sense but you also should consider the burden of upkeep. Who's going to mow the lawn at this house? Who's going to be there in the winter to make sure the pipes don't freeze when there's a cold spell if you don't have an AirBnB guest? Who's going to clean between guests? Rake leaves? Shovel snow?
Home ownership is a significant investment not just in money but also in time.
I think you're badly underestimating how much commitment this will take and possibly also overestimating the ease of finding renters to offset your cost. I would definitely think long and hard before going ahead with this plan.
Also, you should have an answer for the question: "Why now?" Are property prices appreciating in your parents' town? If not, what's the rush to buy a place now?
posted by Nerd of the North at 1:27 AM on June 9, 2016 [1 favorite]
Home ownership is a significant investment not just in money but also in time.
I think you're badly underestimating how much commitment this will take and possibly also overestimating the ease of finding renters to offset your cost. I would definitely think long and hard before going ahead with this plan.
Also, you should have an answer for the question: "Why now?" Are property prices appreciating in your parents' town? If not, what's the rush to buy a place now?
posted by Nerd of the North at 1:27 AM on June 9, 2016 [1 favorite]
Response by poster: Thank you so much for all the advice. This is incredibly helpful. My parents are wonderful (so it isn't a personality conflict) - just a need for my own space.
The rental/AirBnB money isn't vital to the purchase, but I just wanted to figure out a solution for when I'm not there. The housing market isn't terrible in their town, but houses are pretty cheap compared to the city I'm in now.
There are people I could tap to be a caretaker or look after the house when I'm not there. I prefer a house over an an apartment, and buying over renting, but I'm going to think about all of this.
I'm not sure what I'm going to do yet, but this has given me a lot to consider. Thanks. You're great.
posted by Zosia Blue at 8:08 AM on June 9, 2016 [1 favorite]
The rental/AirBnB money isn't vital to the purchase, but I just wanted to figure out a solution for when I'm not there. The housing market isn't terrible in their town, but houses are pretty cheap compared to the city I'm in now.
There are people I could tap to be a caretaker or look after the house when I'm not there. I prefer a house over an an apartment, and buying over renting, but I'm going to think about all of this.
I'm not sure what I'm going to do yet, but this has given me a lot to consider. Thanks. You're great.
posted by Zosia Blue at 8:08 AM on June 9, 2016 [1 favorite]
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