Help me think through a potential house move
January 4, 2024 4:59 AM Subscribe
I'm considering moving into an apartment owned by my parent - in effect becoming their tenant. Help me think through the financial and other aspects of this. Is there anything I'm not considering?
My parent owns a beautiful apartment in a really nice neighbourhood. There is zero chance I would ever be able to afford to buy a place in this area.
I own my own place, in a much less desirable neighbourhood which is miles away from anyone I know and from work. I'd like to sell it and move somewhere nicer. Instead of immediately moving into a new place, I've been thinking about moving into my parent's place. Currently they live abroad, the apartment is tenanted and I manage this for them.
The rental income from the apartment is important to my parent. The rent is high, but average for the area. If I moved into their place, I'd need to get a roommate to ensure my parent's income stream remained unaffected. I couldn't afford the whole of the rent on my own.
The advantage to me of living in my parent's apartment would be living in a really nice apartment in an area I could otherwise never afford. It's also very close to where many of my friends live, and well-linked for transport, so my commute would be shorter and my social life would be positively impacted. The place is also big enough for me to have a separate area to set up my home office - currently I just work from my tiny living room but the master bedroom in the apartment is so big that it could easily serve as a combination bedroom and office. This would leave the living room free for chilling out/having friends over etc. Also when it came time for me to buy my own place again I could be a chain-free buyer.
The advantage to my parent would be having a tenant (me) they could trust to take care of the property and also oversee any repairs etc.
The disadvantages as far as I can see are:
1) Living with a roommate - I haven't done so for years and I think it would be a challenge to give up the independence of living alone. I've been toying with the idea of a Monday-Friday let so that I could have the place to myself on weekends. It also might be hard to find someone: the second bedroom is pretty small.
2) The apartment is in an old Victorian building and needs frequent repairs - I'm currently arranging to have a leak repaired! It is a very high maintenance place; I've had to deal with frequent issues. I currently manage these fine and the tenants are really happy and have lived there for years; but living myself in a place which needs such frequent maintenance could be really stressful. I've been fairly lucky in my living conditions to date and haven't had to deal with living in places that need frequent repair or maintenance work.
3) The kitchen is tiny and has no windows. This could be really challenging - I'm used to having much more space in my kitchen - especially if I had to share the kitchen with a roommate.
I'm confident that becoming my parent's tenant wouldn't impact my relationship with my parent.
When my parent eventually passes, the apartment will pass on to me and my siblings, so there's no question of me moving in there then to live there by myself unless I could afford to buy them out - and I doubt that's going to happen. We'd have to arrange for it to be sold and split up the proceeds.
I'd love to hear more experienced people's thoughts on whether I've overlooking any glaring issues, from people who have been their parent's tenants and how that's worked out for them etc.
My parent owns a beautiful apartment in a really nice neighbourhood. There is zero chance I would ever be able to afford to buy a place in this area.
I own my own place, in a much less desirable neighbourhood which is miles away from anyone I know and from work. I'd like to sell it and move somewhere nicer. Instead of immediately moving into a new place, I've been thinking about moving into my parent's place. Currently they live abroad, the apartment is tenanted and I manage this for them.
The rental income from the apartment is important to my parent. The rent is high, but average for the area. If I moved into their place, I'd need to get a roommate to ensure my parent's income stream remained unaffected. I couldn't afford the whole of the rent on my own.
The advantage to me of living in my parent's apartment would be living in a really nice apartment in an area I could otherwise never afford. It's also very close to where many of my friends live, and well-linked for transport, so my commute would be shorter and my social life would be positively impacted. The place is also big enough for me to have a separate area to set up my home office - currently I just work from my tiny living room but the master bedroom in the apartment is so big that it could easily serve as a combination bedroom and office. This would leave the living room free for chilling out/having friends over etc. Also when it came time for me to buy my own place again I could be a chain-free buyer.
The advantage to my parent would be having a tenant (me) they could trust to take care of the property and also oversee any repairs etc.
The disadvantages as far as I can see are:
1) Living with a roommate - I haven't done so for years and I think it would be a challenge to give up the independence of living alone. I've been toying with the idea of a Monday-Friday let so that I could have the place to myself on weekends. It also might be hard to find someone: the second bedroom is pretty small.
2) The apartment is in an old Victorian building and needs frequent repairs - I'm currently arranging to have a leak repaired! It is a very high maintenance place; I've had to deal with frequent issues. I currently manage these fine and the tenants are really happy and have lived there for years; but living myself in a place which needs such frequent maintenance could be really stressful. I've been fairly lucky in my living conditions to date and haven't had to deal with living in places that need frequent repair or maintenance work.
3) The kitchen is tiny and has no windows. This could be really challenging - I'm used to having much more space in my kitchen - especially if I had to share the kitchen with a roommate.
I'm confident that becoming my parent's tenant wouldn't impact my relationship with my parent.
When my parent eventually passes, the apartment will pass on to me and my siblings, so there's no question of me moving in there then to live there by myself unless I could afford to buy them out - and I doubt that's going to happen. We'd have to arrange for it to be sold and split up the proceeds.
I'd love to hear more experienced people's thoughts on whether I've overlooking any glaring issues, from people who have been their parent's tenants and how that's worked out for them etc.
Response by poster: Just to add: if I did do this, it would be timed according to when the current tenancy agreement is due to expire. No one is getting unceremoniously kicked out!
posted by unicorn chaser at 5:18 AM on January 4
posted by unicorn chaser at 5:18 AM on January 4
I think this only makes sense if your siblings and parents are willing to let you just buy the apartment from your parents (and then perhaps write you out if any other inheritance). Then your parents could invest the money and use some for income as needed.
My parents own our house and my mom is anxious and oh boy does it show up anything we need to change anything. Like can I be trusted to paint, do minor home repairs, etc. If something “bad” happens is it somehow my fault or negligence? There’s always a power dynamic involved- more than was anticipated. Liked when I wanted to get a dog and mentioned it she just flat out said “no you can’t do that.” (I need allergy shots so I can’t for a while anyway, but I will definitely be doing it in the future anyway)
Clearly outline what would be your responsibility to repair/costs versus theirs. If you’re there you’re like to pick up “easy” home repairs which would increase the cost of living there.
posted by raccoon409 at 5:23 AM on January 4 [2 favorites]
My parents own our house and my mom is anxious and oh boy does it show up anything we need to change anything. Like can I be trusted to paint, do minor home repairs, etc. If something “bad” happens is it somehow my fault or negligence? There’s always a power dynamic involved- more than was anticipated. Liked when I wanted to get a dog and mentioned it she just flat out said “no you can’t do that.” (I need allergy shots so I can’t for a while anyway, but I will definitely be doing it in the future anyway)
Clearly outline what would be your responsibility to repair/costs versus theirs. If you’re there you’re like to pick up “easy” home repairs which would increase the cost of living there.
posted by raccoon409 at 5:23 AM on January 4 [2 favorites]
So you own now, and you want to move into a rental, one that is sure to end without you having a place to live and only part equity, IN LONDON, and you're wondering if this is a good idea?
It's a terrible idea. If you can only afford poorly located London flats now, it seems unlikely you are going to be in a position to buy back into the market in the future.
The only way to make this a positive move is to rent your parents' place and rent out your place, maintaining two apartments. That way if the living with a roomate is a disaster you can at least return to your own home.
(Obviously I could be wrong about all of this!)
posted by DarlingBri at 5:29 AM on January 4 [15 favorites]
It's a terrible idea. If you can only afford poorly located London flats now, it seems unlikely you are going to be in a position to buy back into the market in the future.
The only way to make this a positive move is to rent your parents' place and rent out your place, maintaining two apartments. That way if the living with a roomate is a disaster you can at least return to your own home.
(Obviously I could be wrong about all of this!)
posted by DarlingBri at 5:29 AM on January 4 [15 favorites]
So...if I understand the maths right - it sounds like your parent would be charging you market rent (because you say they wouldn't see a reduction in their income stream when you move in). If you could afford to live in this flat in a good neighbourhood, with a flatmate, doesn't that mean you could also afford to live in a different, nice flat in this neighbourhood with a flatmate? One that would be less complicated? Then rent your own flat out, if you can cover the mortgage on it that way.
It does mean you effectively getting two rental properties to manage (yours as well as your parent's). But it also means you get to live in the nice area without losing the equity of your own flat. And you get to keep those nice, uncomplaining tenants in your parent's flat, rather than moving in yourself, finding you don't like it, and having to find new tenants, who turn out to kick up a stink about the flat's condition.
Or, move into your parent's flat but keep your own as a rental property so you still have that equity. I think - especially if you're in London - that having equity in a property that's kept up with market values is probably going to be more valuable than being chain free when you next come to move.
posted by penguin pie at 6:15 AM on January 4 [16 favorites]
It does mean you effectively getting two rental properties to manage (yours as well as your parent's). But it also means you get to live in the nice area without losing the equity of your own flat. And you get to keep those nice, uncomplaining tenants in your parent's flat, rather than moving in yourself, finding you don't like it, and having to find new tenants, who turn out to kick up a stink about the flat's condition.
Or, move into your parent's flat but keep your own as a rental property so you still have that equity. I think - especially if you're in London - that having equity in a property that's kept up with market values is probably going to be more valuable than being chain free when you next come to move.
posted by penguin pie at 6:15 AM on January 4 [16 favorites]
Would you consider such a move if your parent did not own this apartment?
Since you would be renting the unit at market rate, the fact that your parent owns it doesn't make a financial difference right now to you or to your parent.
You say your current tenants have lived there for years and are very happy. Do they want to leave? If not, this will still suck for them, even if it happens at lease-renewal time. Also as a dispassionate property manager, would you want to get rid of reliable happy tenants in favor of someone whose income cannot cover the rent?
Maybe you'll be ok living with a roommate again now, but if you're not-- what then?
Seconding DarlingBri, it's a big risk to get off the property ownership ladder. If prices increase while you don't own, you will be not able to afford to buy even something similar to what you have now.
What if your parent wants to return from living abroad?
Will this complicate things with your siblings in terms of how they view inheritance?
Just some thoughts here. I now co-own my home with my in-laws, in a much different situation, but I've thought a lot about this stuff in general.
I think there are emotional reasons this may feel like a good idea for you, but lots of practical and financial complications to recommended against it.
posted by hovey at 6:18 AM on January 4 [10 favorites]
Since you would be renting the unit at market rate, the fact that your parent owns it doesn't make a financial difference right now to you or to your parent.
You say your current tenants have lived there for years and are very happy. Do they want to leave? If not, this will still suck for them, even if it happens at lease-renewal time. Also as a dispassionate property manager, would you want to get rid of reliable happy tenants in favor of someone whose income cannot cover the rent?
Maybe you'll be ok living with a roommate again now, but if you're not-- what then?
Seconding DarlingBri, it's a big risk to get off the property ownership ladder. If prices increase while you don't own, you will be not able to afford to buy even something similar to what you have now.
What if your parent wants to return from living abroad?
Will this complicate things with your siblings in terms of how they view inheritance?
Just some thoughts here. I now co-own my home with my in-laws, in a much different situation, but I've thought a lot about this stuff in general.
I think there are emotional reasons this may feel like a good idea for you, but lots of practical and financial complications to recommended against it.
posted by hovey at 6:18 AM on January 4 [10 favorites]
It sounds like you're slightly underestimating the impact of sharing a flat. Sure, the master bedroom is big enough to be a bedroom and office, but is it big enough if it's the only room you have that's not a shared space? You talk about chilling in the living room or entertaining friends there - fine, but your flatmate might want to use that space too, especially as their bedroom is pretty small.
Having said that, the access to a better social life might be a worthwhile trade-off. Only you know whether that's true in your case.
posted by pianissimo at 6:43 AM on January 4 [1 favorite]
Having said that, the access to a better social life might be a worthwhile trade-off. Only you know whether that's true in your case.
posted by pianissimo at 6:43 AM on January 4 [1 favorite]
You might be missing that any rental income you earn on your own flat is subject to tax at your regular income rate.
If part of the plan is to rent your flat out to cover that mortgage and possibly part of the rent on your parent's place, be sure you're budgeting with your after tax rental income, not gross.
posted by Chausette at 6:47 AM on January 4 [3 favorites]
If part of the plan is to rent your flat out to cover that mortgage and possibly part of the rent on your parent's place, be sure you're budgeting with your after tax rental income, not gross.
posted by Chausette at 6:47 AM on January 4 [3 favorites]
Determine what problem you’re trying to solve here.
It sounds as if the main concern is that you would prefer to live somewhere closer to work/ closer to friends and family than you are at the moment. So what is stopping you from solving that problem?
Find a more suitable location and figure out how you can afford to live there. By the sound of it, that would probably mean flat share but should also include holding out for a place suited to sharing in terms of size of rooms, shared areas etc.
It doesn’t sound as if you’d pick your parent’s place all things being equal because it has significant disadvantages both in terms of condition and size. And that is without even considering family dynamics.
So to pick your parent’s place despite these disadvantages you’d need some kind of compensation like below market rent. It sounds as if that is not an option. So renting your parent’s place is not a good way of solving the problem you’re trying to solve.
The question of what to do with your own place once you solve the problem is separate. Assuming you have some equity in the place and market rent would cover the mortgage plus a bit extra to protect you from interest rate changes and expensive repairs I’d be very reluctant to sell a flat in the south of England/ London to rent somewhere for all the reasons people have pointed out. I know of too many people who did sell and now cannot get back on the property ladder.
posted by koahiatamadl at 6:54 AM on January 4 [8 favorites]
It sounds as if the main concern is that you would prefer to live somewhere closer to work/ closer to friends and family than you are at the moment. So what is stopping you from solving that problem?
Find a more suitable location and figure out how you can afford to live there. By the sound of it, that would probably mean flat share but should also include holding out for a place suited to sharing in terms of size of rooms, shared areas etc.
It doesn’t sound as if you’d pick your parent’s place all things being equal because it has significant disadvantages both in terms of condition and size. And that is without even considering family dynamics.
So to pick your parent’s place despite these disadvantages you’d need some kind of compensation like below market rent. It sounds as if that is not an option. So renting your parent’s place is not a good way of solving the problem you’re trying to solve.
The question of what to do with your own place once you solve the problem is separate. Assuming you have some equity in the place and market rent would cover the mortgage plus a bit extra to protect you from interest rate changes and expensive repairs I’d be very reluctant to sell a flat in the south of England/ London to rent somewhere for all the reasons people have pointed out. I know of too many people who did sell and now cannot get back on the property ladder.
posted by koahiatamadl at 6:54 AM on January 4 [8 favorites]
Snatching up someone's place in their years-long home that they're happy in is not very kind, even if it's all on the up-and-up legally. Looking at it business-wise, it also doesn't seem like a great prospect on your parents' part to replace long-time stable tenants with someone who will be actively making plans to move on.
posted by dusty potato at 6:55 AM on January 4 [6 favorites]
posted by dusty potato at 6:55 AM on January 4 [6 favorites]
The people I know who live in family-owned places never actually pay market rate, or if they do it is still eventually returned to them in some way, like knowing they will be given the place eventually. So what I'm really saying is, the details of what you work out with your parents will determine if this is a great, so-so, or terrible idea both in terms of the finances but also in terms of relationships.
posted by Dip Flash at 7:13 AM on January 4 [1 favorite]
posted by Dip Flash at 7:13 AM on January 4 [1 favorite]
It would be incredibly difficult to find a roommate who isn't allowed in the apartment on weekends and who only gets use of one small room, since it sounds like you are using the living room as a bedroom and office. And it's also very unfair to them. Unless this is someone who works in the city and has a family outside of the city they see on weekends who just needs a bed and whose other circumstances won't possibly change, who also fits all of the other qualifications you are looking for in a roommate, I think there's a very slim chance of this happening or of it being a pleasant experience.
posted by twelve cent archie at 7:24 AM on January 4
posted by twelve cent archie at 7:24 AM on January 4
Response by poster: Thanks for all the thoughts, guys. Some very useful insights I hadn't thought of before.
Trying not to threadsit, but my understanding is that Monday to Friday lets are a thing for people who have homes outside the city but have jobs in it and want a pied a terre for when they're in the city. It seems relatively common on websites like Spare Room etc. They'd get use of all the communal areas - I'd be using the master bedroom as a bedroom and study.
posted by unicorn chaser at 7:29 AM on January 4
Trying not to threadsit, but my understanding is that Monday to Friday lets are a thing for people who have homes outside the city but have jobs in it and want a pied a terre for when they're in the city. It seems relatively common on websites like Spare Room etc. They'd get use of all the communal areas - I'd be using the master bedroom as a bedroom and study.
posted by unicorn chaser at 7:29 AM on January 4
It would be incredibly difficult to find a roommate who isn't allowed in the apartment on weekends... And it's also very unfair to them.
Just not true. Monday to Friday lets are absolutely a thing for the reason unicorn chaser says. It cuts down your pool of potential flatmates a fair bit, but doesn't make it impossible, and it's not unkind to the person renting it - they specifically take the room on the basis they're getting proportionately cheaper rent in exchange for not being around at the weekends, when they go off to their family/second home/partner's home/whatever.
posted by penguin pie at 8:24 AM on January 4
Just not true. Monday to Friday lets are absolutely a thing for the reason unicorn chaser says. It cuts down your pool of potential flatmates a fair bit, but doesn't make it impossible, and it's not unkind to the person renting it - they specifically take the room on the basis they're getting proportionately cheaper rent in exchange for not being around at the weekends, when they go off to their family/second home/partner's home/whatever.
posted by penguin pie at 8:24 AM on January 4
Dear god no, this is a horrible idea.
I cannot imagine why anyone, ever, would want to give up their own house WHICH THEY OWN, to rent from parents and live with roommates.
posted by Violet Hour at 8:50 AM on January 4
I cannot imagine why anyone, ever, would want to give up their own house WHICH THEY OWN, to rent from parents and live with roommates.
posted by Violet Hour at 8:50 AM on January 4
The rental income from the apartment is important to my parent. The rent is high, but average for the area. If I moved into their place, I'd need to get a roommate to ensure my parent's income stream remained unaffected. I couldn't afford the whole of the rent on my own.
The advantage to me of living in my parent's apartment would be living in a really nice apartment in an area I could otherwise never afford
This logic doesn't logic -- all of these statements can't be true at once. If your parent's place is market rate for the area then it's either just as unaffordable as the rest of the area, OR, the area itself is in fact affordable if you have a roommate. In which case you could live in the neighborhood without this (somewhat) cockeyed scheme.
Why is this preferable to just getting a regular apartment in that neighborhood with a roommate exactly?
I mean as far as I can tell, the only part of the scheme that isn't either a break-even or an actual disadvantage for you is: you'd only have one home to manage. Which isn't nothing I guess?
posted by We put our faith in Blast Hardcheese at 10:18 AM on January 4 [5 favorites]
The advantage to me of living in my parent's apartment would be living in a really nice apartment in an area I could otherwise never afford
This logic doesn't logic -- all of these statements can't be true at once. If your parent's place is market rate for the area then it's either just as unaffordable as the rest of the area, OR, the area itself is in fact affordable if you have a roommate. In which case you could live in the neighborhood without this (somewhat) cockeyed scheme.
Why is this preferable to just getting a regular apartment in that neighborhood with a roommate exactly?
I mean as far as I can tell, the only part of the scheme that isn't either a break-even or an actual disadvantage for you is: you'd only have one home to manage. Which isn't nothing I guess?
posted by We put our faith in Blast Hardcheese at 10:18 AM on January 4 [5 favorites]
I don't think the plan in general is terrible, but I agree strongly that you should not sell your place in order to rent for an indeterminate length of time. If you can keep your place and rent it out that opens up some possibilities. Not sure about the UK, but in the US there are companies that will handle all the admin for you for a reasonable fee, so you wouldn't deal with the headaches.
Unless you really love your parents' place, why not find a similar but cheaper apartment in the more desirable area to avoid the roommate drama?
You might also talk to your sibling about possible future arrangements that would let you continue to live there - maybe co-own it with them and you live there and pay them 50% reduced rent?
posted by Rock Steady at 12:33 PM on January 4 [2 favorites]
Unless you really love your parents' place, why not find a similar but cheaper apartment in the more desirable area to avoid the roommate drama?
You might also talk to your sibling about possible future arrangements that would let you continue to live there - maybe co-own it with them and you live there and pay them 50% reduced rent?
posted by Rock Steady at 12:33 PM on January 4 [2 favorites]
Agreeing with much of what is being said here, and strongly suggest that if you're living in their apartment, you may find many many more maintenance issues than you're aware of now. Prevention is better than remediation. A tenant doesn't have the investment on keeping everything up and won't tell you when something's iffy, if it doesn't affect them. A Victorian home be lovely, but it can suck you dry. Will your parents be willing to pay for expensive repairs, or will it be on you?
If you do decide to do this, or even if you decide to move into another apartment to see if it is actually an area that is livable for you, don't sell your house for at least 18 months. Rent it. It's no more work to maintain your own place and act as manager--which sounds like it may be less work if yours is in better shape--than it is to act as their manager. At least there would be a safety net, if it turned sour. And another thing to think about: if for whatever reason it doesn't work out, could that affect your relationship with your parents? They might not be best pleased that you're not happy with what they think is the best for you.
I'm a bit stuck on the fact that you are their manager anyway. I presume you're unpaid. If you move into their apartment and pay them at the same rate as the current tenant, their income stream remains untouched at a positive, but yours drops into a negative, plus you lose your privacy even with a M-F-let compatible roommate, along with the possibility of getting one that you definitely don't want to deal with.
posted by BlueHorse at 12:39 PM on January 4 [6 favorites]
If you do decide to do this, or even if you decide to move into another apartment to see if it is actually an area that is livable for you, don't sell your house for at least 18 months. Rent it. It's no more work to maintain your own place and act as manager--which sounds like it may be less work if yours is in better shape--than it is to act as their manager. At least there would be a safety net, if it turned sour. And another thing to think about: if for whatever reason it doesn't work out, could that affect your relationship with your parents? They might not be best pleased that you're not happy with what they think is the best for you.
I'm a bit stuck on the fact that you are their manager anyway. I presume you're unpaid. If you move into their apartment and pay them at the same rate as the current tenant, their income stream remains untouched at a positive, but yours drops into a negative, plus you lose your privacy even with a M-F-let compatible roommate, along with the possibility of getting one that you definitely don't want to deal with.
posted by BlueHorse at 12:39 PM on January 4 [6 favorites]
I'd lean heavily away from booting out the current tenants on a whim unless you are certain that you are going to stay in the apartment for, say, 5 years or more i.e., you become the new long-term good tenant. That you would do it at the end of the current lease cycle is immaterial; you are kicking people out of their long-term, stable home. As an excellent long-term tenant who has experienced this I can tell you: it's shit.
If you boot the current long-term tenants out and only last in your parents' place for, say, a year, the current tenants have lost a stable living situation and your parents have lost good tenants. Both are really hard to find and hard to replace.
posted by lulu68 at 3:50 PM on January 4 [1 favorite]
If you boot the current long-term tenants out and only last in your parents' place for, say, a year, the current tenants have lost a stable living situation and your parents have lost good tenants. Both are really hard to find and hard to replace.
posted by lulu68 at 3:50 PM on January 4 [1 favorite]
You are not logged in, either login or create an account to post comments
Can you/they just kick the tenants out whenever is convenient for you to move in? These laws depend on jurisdiction.
"Really nice place" and "Really high maintenance" are not really terms that coexist in my head for the same apartment, even as a renter.
Nobody wants to be your roommate but be kicked out literally every weekend.
Someone probably does want to rent a small room in a very nice area. I would seek an acquaintance. Cohabitating can mess with friendships, and it's really hard to screen strangers for comparability. Also there will be a large inherent power imbalance in any roommate situation, so think about how you will address that.
When your parent dies, depending on the rest of the estate, you may be able to forego your share of other assets in order to get the apartment, if this is mutually agreeable to the parties. You may also be able to count rent while they are alive toward equity in the place. Heck, the parent could decide to just give it to you now in exchange for an annuity paid by you to them. All these issues will have to be discussed and written down under guidance of a lawyer while parent is alive if you do really want to go for it.
This could be really cool and fun, or it could be a bit of a disaster, just some thoughts to consider. Good luck!
posted by SaltySalticid at 5:14 AM on January 4 [2 favorites]