Multi-Generational Home Purchase

3

34rlsa

Recycles dryer sheets
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We are considering purchasing a “multi-generational” home in partnership with our DD and SIL.

The choice is not out of any necessity i. e. health or financial problems with either party. We have a great relationship and believe all involved would be very happy sharing a home together.

The “children” (mid 30s) have successful professional careers in health care ( both are DPTs). They have zero debt (currently renting)… have no kids of their own and no kids in their future. Forum members would be proud of all aspects of their financial responsibility.

We would sell our existing home to fund our share of the purchase price of the new multi-generational home. This would be our last home… our retirement home.

I’m looking for input on the pros and cons of this type arrangement and opinions on how to define the legal ownership of the home.

Also looking for opinions on how to share all of the expenses… taxes, insurance, utilities, maintenance.

Thanks
 
Someone once told me, be close enough to care for your folks, but far enough away so you don't hear them scream. I like that idea.
 
What's your goal in all this? Think of that first. In theory a multi family house will be bigger and cost more money.

Does one of you have a health issue? Do you have pets that need care while you could be traveling? Do you snowbird? Do you like a big outdoor space and want help taking care of it.

In my mind it's not the money issue, it's who does what chores, if you have compatible sleeping habits and similar standards about mess and housekeeping chores.

If you go that route it's imperative you each have private living spaces where you have control of your remote and a little privacy. I don't know the logistics but in your shoes I'd have them move into your house for a few months and then if it doesn't work out, no harm, no foul.
 
Check with a CPA on tax issues. If the house has appreciated in value when you both die, heirs will get a stepped-up basis and never have to pay taxes on the gain. This might get screwed up if you are not the sole owners. Something like borrowing the money from the kids with the house as security might be a workaround, but you really need a tax expert and not SGOTI.
 
I love the idea but don't know of many options at least not around here. Is this starting to be a thing? Good luck.

In my neighborhood, one family has both sets of parents living in but all one unit. It's a large home (~4500 sqft I think) and when the family went to the HOA for a variance on house setback at rear so they could add a bathroom many of the other owners at the meeting thought the real problem was too many people/generations in the home. I don't see multigen places being built in my suburb ever with that attitude.

I do know someone who purchased a duplex near here with parental family on the first floor and younger gen upstairs. The street is filled with duplexes, mostly rentals and I few are owner occupied even in one of the units. I don't know how their property is titled and I assume they handle utilities (separate metering except water), insurance, and taxes much like would be done in a rental situation. now I wonder if each family can officially take part of the property taxes. Important with property tax rates around here and SALT limitations.
 
What happens if your DD and SIL decide they don't like the arrangement after awhile, or the house/location doesn't suit them anymore?
 
34rlsa said:
We are considering purchasing a “multi-generational” home in partnership with our DD and SIL.

The choice is not out of any necessity i. e. health or financial problems with either party. We have a great relationship and believe all involved would be very happy sharing a home together.

The “children” (mid 30s) have successful professional careers in health care ( both are DPTs). They have zero debt (currently renting)… have no kids of their own and no kids in their future. Forum members would be proud of all aspects of their financial responsibility.

We would sell our existing home to fund our share of the purchase price of the new multi-generational home. This would be our last home… our retirement home.

I’m looking for input on the pros and cons of this type arrangement and opinions on how to define the legal ownership of the home.

Also looking for opinions on how to share all of the expenses… taxes, insurance, utilities, maintenance.

Thanks
Click to expand...


Nope !
 
gwraigty said:
What happens if your DD and SIL decide they don't like the arrangement after awhile, or the house/location doesn't suit them anymore?
Click to expand...

Definitely something to consider... circumstances could change for any number of reasons.
 
Good luck. You may need it

I like to picture a multi-generational family arrangement as being a wonderful, even idyllic situation. Combine age and wisdom with youth and strength and it's like an old-time Disney story.

Unfortunately, I can also envision some close relationships souring from too much closeness. Circumstances evolve; people change; families splinter.

There was a time I couldn't conceive of my siblings growing apart. But time and distance corrode familial bonds. Both of my brothers are recluses, and my two sisters developed health problems which lead to severe mood swings. If we all lived in the same house today, you'd see us on the news! (I make light of it because gallows humor is my way of coping with sadness.)

OTOH, my wife's brother built a MIL suite onto his home. It was a complete apartment which could be isolated from the rest of the house. BIL's children got to know their grandmother, learn all the family stories and exchange love during most of their childhood. DMIL lived with them for two decades before dying a couple years ago. I hope your plan turns out as least as happily as theirs did.
 
I volunteer with a lady who lives on a "compound" with her family. They're not wealthy, but own a few acres in the country. So, parents, brother/wife, my friend another lady who is like family have their own homes on this property. I love this idea and would do that if I had the opportunity. They have each other for security, get together (or not) but are within an earshot of each other. They built their homes (again small homes) to their liking.
 
I think it could be very beneficial for retired grandparents (probably great grand parents) and young adults with a new family. The young mom and dad have live in sitters, grandparents get to see kids grow (without the full responsibility that they had), kids get to grow with their grandparents. Very common elsewhere, out of necessity, maybe, but still beneficial to all.
 
34rlsa said:
We have a great relationship and believe all involved would be very happy sharing a home together.
Click to expand...

Before you go any further, I'd want more than a belief they'd be happy, more that you know for sure they are enthusiastic about it. It could definitely change the dynamic for your daughter and her husband if they aren't really both into the idea. Even asking puts them on the spot if they aren't.

Of course, all family dynamics are different, but wow no this would never work for us. And everyone gets along great. Just not underfoot every day. Most homes are only going to have one kitchen, that means meals together. One living room that means...taking turns on what movie to watch or something. (or one couple hides out in the bedroom).

That said, different cultures and families... etc. If you are pursuing, I'd want to get a house that has a double-master setup (or could easily). Ideally separate dens/living rooms, and extra bedrooms for offices/spaces to be separate.

Maybe even look at a duplex and merge it a little, so you can still have equal spaces. You could also then rent out their half if and when they decide to move away.
 
We know a couple of families with accessory dwelling units added on their properties. One is attached and the family did it to care for the grandparents in their later years. The other is a separate dwelling the parents moved into and gave the big house to one of the adult kids.

The one currently in use is the separate dwelling unit and it seems to be working out really well, at least from our friends (the grandparents) perspective. Multi-generational properties are probably more common here in the Bay Area because of home prices / the current housing shortage. Backyard cottages / tiny houses (micro apartments, too!) seem to be a growing trend here.
 
I lived just a 5-minute walk from my grandmother's place for the last 8 years of her life. This was a win-win for both of us. However, this was as much daily family togetherness that I could stand; YMMV. :greetings10:
 
Since a few replies have mentioned separate living areas/spaces...

Just to clarify... the homes we are considering would include a separate wing with our own (smaller) living room, kitchen, bedroom and bath. We would share the main living room, dining room and kitchen for family time together.

As mentioned earlier builders are designing and offering this type of floorpan in many areas around the country. Ideally we would be able to customize the home to meet everyones needs.

As far as getting along and living together under one roof... its the least of our concerns. If anyone has doubts it's me... our DD and SIL are very enthusiastic about the idea... as is my DW. (we have already spent a significant amount of time together living in our existing home).

One of the pros I see is by pulling our resources together the "family" would be able to afford a much nicer home in an upscale neighborhood. And when we're gone the kids would have a wonderful home without a huge mortgage.

Assuming "living under one roof" is not going to be a problem... what other concerns should we consider?

I appreciate all the replies :)
 
We are in the 6th year of a living arrangement like you described with our DD & SIL. It was by choice to reduce our footprint.

It has been working outstanding. We rented for a few years. We moved across country due to a job change and the younger generation purchased the house. There were few rentals here. All shared expenses are split. We keep a spreadsheet and settle mostly monthly.




Most of these living arrangements occur due to an ill parent or a financial concern with a child. Like you, our arrangement was not based on either of those. If you want to PM me, I would be happy to help answer any questions based on our experience.
 
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34rlsa said:
These are homes specifically designed for multi-generation living.

Here's an example:

https://www.stonebridgehomesnw.com/multi-generational-living
Click to expand...

So I didn’t look at each floor plan. But the few I looked at still had a Master Bedroom. Who’s the master? I would think a multi generational floor plan should have at least two identical suites with a master bedroom layout. In your case, you’re describing three adults (counting you and your spouse as one). How would that work if there is one main bedroom and the others need to share a bathroom let alone be smaller in size? To me, the better the design of the house, the better possibly this has to work. People need some private space and ideally that space is more than just a bedroom, especially if the bedroom is on the smaller side.

We’ve actually talked about this. DW is one of three sisters. Their husbands are good guys. I wouldn’t mind a single residence but it would basically have to have three identical “wings” with bedroom, bathroom and some private space for computer and tv watching . . . And then a large common area of kitchen, dining and great room. I think the design would be very important to get right.
 
34rlsa said:
Since a few replies have mentioned separate living areas/spaces...

Just to clarify... the homes we are considering would include a separate wing with our own (smaller) living room, kitchen, bedroom and bath. We would share the main living room, dining room and kitchen for family time together.

As mentioned earlier builders are designing and offering this type of floorpan in many areas around the country. Ideally we would be able to customize the home to meet everyones needs.

As far as getting along and living together under one roof... its the least of our concerns. If anyone has doubts it's me... our DD and SIL are very enthusiastic about the idea... as is my DW. (we have already spent a significant amount of time together living in our existing home).

One of the pros I see is by pulling our resources together the "family" would be able to afford a much nicer home in an upscale neighborhood. And when we're gone the kids would have a wonderful home without a huge mortgage.

Assuming "living under one roof" is not going to be a problem... what other concerns should we consider?

I appreciate all the replies :)
Click to expand...

When you are "gone", your kids would have a home that resembles a duplex but is more combined? That arrangement may be a tough sell if they decide to move or downsize.
 
34rlsa said:
This is my biggest concern. I wouldn't want to hold them back from seeking new opportunities. DD says "no problem will take you with us". :)
Click to expand...

With all of the topics started on this forum about declining health of elderly parents, both physical and cognitive, it's not a given that will be possible. Hopefully, you will remain healthy and fit.

If 4 people own the house, don't all 4 have to agree to sell? What if there are cognitive issues in the future and DD and SIL want/need to move and you refuse to sell? I know you can't picture this happening and you wouldn't dream of such a thing right now.

I grew up in a multi-generational house. 3 generations. It was not easy. I got along better with my grandparents after I moved out. I guess I'm still in one, with 2 young adults at home, but my husband and I own the house, so there's no conflict as to who makes the important decisions.

With 4 people owning the house in your scenario, there will be conflict. What if one couple wants more family time in the common areas than the other couple? The working couple might need more alone time to unwind than the retired couple. Will you be able to respect each other's privacy if one couple wants to have friends over?
 
Go For It

With 1/3 of Baby Boomers having saved nothing for retirement, multi-generational living is sure to see a huge upswing.

In your case, you really get along with your daughter and son-n-law, and you are not doing so due to financial necessity. It's not like you cannot make adjustment if things do not work out. I would consult a tax accountant and research the need for having a basic level legal agreement in place. If you have other kids they might see this as some form of favoritism so you'll need to have a conversation with them.

In the USA, over 60 million-plus live in a multi-generation households. Lot's of these homes include young adults over the age of 25. This is the category that applies to our household with young adult twins. Our daughters plan to stay at home until they have a strong down payments for a house, and plan to just skip the whole rental housing market.

Our house is a two story with a walk-out lower level that is set-up as an apartment with Full Bath, Kitchen, and Laundry and storage. I installed sound proof installation in the ceiling between floors, and there is a a deck off the back of the lower level that goes into the woods. We built the house this way thinking we would have a safety net for our children if they ever needed it. Currently, we all live together in the upper level, and if someone needs alone time they always can escape to the lower level. It's usually me to watch something different on TV. We treat them as adults and they help out with chores and groceries. But you're always a parent and it's another set of years to raise your kids, pass on wisdom, and even make up for earlier mistakes. All of their additional savings goes into their house down payment fund. I would be concerned if they do not eventually launch as fully independent adults down the road but for now this arrangement works well.

We live in a secluded part of city on a ravine and it's not at all your typical suburban housing community. We are getting some enquiring neighbors and family members wondering when our kids plan to move out. Take a different path and you will get criticism and judgement and that's something you need to be ready for. Our twins went to the same college and after the first year they decided to compute to save cost. I remember everyone saying that they were just not going to get the full college experience. We ignored the criticism and today our kids have zero college debt.

I'd say be a pioneer and pave the way for future with a good example of multi-generation living. Housing cost is just plain out of reach for so many people and we have to figure out alternatives. Complete your due diligence, and then jump all in, and be grateful you have such wonderful daughter and son-n-law.
 
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We have thought about this also. Both of our kids have said we would be welcome with them in the future. Both of our adult kids have lived back at home off and on, it always worked out, and it is nice to develop an "adult" relationship with them, rather than "parent/child", if that makes sense.

There is a multi gen neighborhood being built in a nearby town. We went and walked through a couple of models, basic idea was a regular 3 bed 2 bath home with a smaller one bed, bath with kitchen/living area attached, separated by a frosted glass door. They were well built with 3 car garages.
We aren't ready to commit yet, but it is something we have thought about.
When I was growing up, my grandparents lived with us for several years. It was really nice to have them so nearby and very helpful for my folks.
I say, go for it if that is what you want.
 
My suggestion is to find a home that can ultimately be converted to a duplex or a home with a 'mother-in-law' unit. The reason being is that eventually one couple will pass and the spare living unit can be rented.
 
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