Important, I get this wrong, no sporty car for me ever!
Discussion
Hi all
Important calculation coming up and if I cock up the situation, it'll have a severe effect on my fun car purchasing powers for the next 25 years, so obviously this is life or death serious. I NEED HELP!
So the background info you PH genii need....
The boss and I bought a house with an outbuilding that needs converting to house my inlaws for a long as it takes ( could be 25 years at the outside, they are fit and not that old).
We bought the place on the understanding that they would contribute a sensible amount to the costs of providing said granny annex. Now, there is a big disagreement with the wife's siblings about how much they should be paying, with one sibling saying nothing, and one saying "a bit" but not putting any figures on it.
We think a sensible amount would be enough to cover our costs of tying up a chunk of our capital in said granny flat. We are not rich enough to do it for nothing, ( hence the thread title!).
If it comes down to a calculation being done due to the siblings wanting to screw us down to an absolute minimum contribution from the oldies, what costs do you clever PHers think are reasonable to include, bearing in mind we don't want to charge them rent as such....
Our thoughts are something along the lines of:
Our mortgage interest on the extra chunk of capital we laid out to get a property with a suitable annex
Wear and tear on the property while they are in there ( or alternatively that the annex should be made good once they vacate it, hopefully after a very long and happy period in residence)
Some consideration for the fact that we can't move until they are both dead!
Over to you guys, and please just don't tell me I am bonkers!
Important calculation coming up and if I cock up the situation, it'll have a severe effect on my fun car purchasing powers for the next 25 years, so obviously this is life or death serious. I NEED HELP!
So the background info you PH genii need....
The boss and I bought a house with an outbuilding that needs converting to house my inlaws for a long as it takes ( could be 25 years at the outside, they are fit and not that old).
We bought the place on the understanding that they would contribute a sensible amount to the costs of providing said granny annex. Now, there is a big disagreement with the wife's siblings about how much they should be paying, with one sibling saying nothing, and one saying "a bit" but not putting any figures on it.
We think a sensible amount would be enough to cover our costs of tying up a chunk of our capital in said granny flat. We are not rich enough to do it for nothing, ( hence the thread title!).
If it comes down to a calculation being done due to the siblings wanting to screw us down to an absolute minimum contribution from the oldies, what costs do you clever PHers think are reasonable to include, bearing in mind we don't want to charge them rent as such....
Our thoughts are something along the lines of:
Our mortgage interest on the extra chunk of capital we laid out to get a property with a suitable annex
Wear and tear on the property while they are in there ( or alternatively that the annex should be made good once they vacate it, hopefully after a very long and happy period in residence)
Some consideration for the fact that we can't move until they are both dead!
Over to you guys, and please just don't tell me I am bonkers!
Thank you for the mostly useful contributions 
Yes we need to agree the level of contributions with the inlaws, but would also like to be a/ fair to the siblings and b/ talking to them in the future. Don't want to do them or ourselves out of a pile of cash.....
Problem is one sibling says it's our idea so we should pay, and the other is fence sitting. We may be forced in to getting a third party to try and assess our benefit and costs from the arrangement.
The inlaws will sell their place and give all siblings an advance on inheritance, once our costs are agreed and paid. One sibling is trying to convince them to adjust down the wife's inheritance share by the same amount they will contribute, effectively making us, relative to the other siblings, pay for housing the inlaws.
Therefore we are forced to fight our corner and it has all got a bit heated!
Yes we need to agree the level of contributions with the inlaws, but would also like to be a/ fair to the siblings and b/ talking to them in the future. Don't want to do them or ourselves out of a pile of cash.....
Problem is one sibling says it's our idea so we should pay, and the other is fence sitting. We may be forced in to getting a third party to try and assess our benefit and costs from the arrangement.
The inlaws will sell their place and give all siblings an advance on inheritance, once our costs are agreed and paid. One sibling is trying to convince them to adjust down the wife's inheritance share by the same amount they will contribute, effectively making us, relative to the other siblings, pay for housing the inlaws.
Therefore we are forced to fight our corner and it has all got a bit heated!
Thanks guys, all interesting stuff. The model we are proposing is that the inlaws pay the cost of conversion, which we think also equates to the cost of servicing the extra mortgage for the annex element of the property for about 20 years.
We know the extra cost we paid for the annex as there is an almost identical property next door that sold the same time we bought ours, but it has no annex. So we can have a rough stab at how much it is going to cost to service.
So if the inlaws pay a lump upfront (of rent if you like) which we plough in to the annex, they get a lifetime lease in return, plus the benefit of speccing the annex how THEY want it (and wheelchair friendly).
If we charge rent then the siblings will kick off (profiting from the inlaws...). DoIng it the upfront way to me is a cleaner arrangement, and we retain full ownership. The inlaws will be protected by written agreement for provision in the event of divorce etc.
Sound fair?
We know the extra cost we paid for the annex as there is an almost identical property next door that sold the same time we bought ours, but it has no annex. So we can have a rough stab at how much it is going to cost to service.
So if the inlaws pay a lump upfront (of rent if you like) which we plough in to the annex, they get a lifetime lease in return, plus the benefit of speccing the annex how THEY want it (and wheelchair friendly).
If we charge rent then the siblings will kick off (profiting from the inlaws...). DoIng it the upfront way to me is a cleaner arrangement, and we retain full ownership. The inlaws will be protected by written agreement for provision in the event of divorce etc.
Sound fair?
Clapham- I applaud your altruistic nature but am with walm on that point. We already said that if the oldies vacated the annex way sooner than expected( haven't nailed it down but I had an idea that 8 or so years was fair) we would have a calc done and work out what we needed to reimburse the other siblings. We would then be able to realise cash from the annex by renting it out to mitigate any loan/remortgage we might have to do to square things up with the other siblings.
Ref intangible benefits I always thought that would cut all ways. Initially we would get assistance with babysitting, school runs etc but later on would obviously have to look after the oldies. All siblings would benefit from knowing the oldies were being looked out for.
Foliage - market value of the annex is v difficult to quantify as it is tied to the main house. Planning is in place to develop it (it is a detached outbuilding) but only as an ancillary dwelling. If it could be spun off as a separate dwelling then it would be too expensive for the oldies to buy from us, being a seriously nice barn on a lovely part of the plot, with tremendous views and a southwesterly aspect....
Walm- I am using 4% per year interest cost in my man maths. I know how much extra mortgage I am carrying compared to buying next door equivalent, annex-less property.
X jay, the oldies will pay their bills etc, and it's a detached annex which is already built in terms of the shell, it needs converting to be habitable. We already bought the structure, plot it sits on and the planning permission to develop it.
Thanks for all the input, interesting stuff
Ref intangible benefits I always thought that would cut all ways. Initially we would get assistance with babysitting, school runs etc but later on would obviously have to look after the oldies. All siblings would benefit from knowing the oldies were being looked out for.
Foliage - market value of the annex is v difficult to quantify as it is tied to the main house. Planning is in place to develop it (it is a detached outbuilding) but only as an ancillary dwelling. If it could be spun off as a separate dwelling then it would be too expensive for the oldies to buy from us, being a seriously nice barn on a lovely part of the plot, with tremendous views and a southwesterly aspect....
Walm- I am using 4% per year interest cost in my man maths. I know how much extra mortgage I am carrying compared to buying next door equivalent, annex-less property.
X jay, the oldies will pay their bills etc, and it's a detached annex which is already built in terms of the shell, it needs converting to be habitable. We already bought the structure, plot it sits on and the planning permission to develop it.
Thanks for all the input, interesting stuff
X jay- the property was bought on the understanding that the oldies would contribute to the cost of putting them up. If we had faffed about doing months of family arguments someone else would have bought it, so I did before any arrangements had been finalised (it is the inlaws money after all). It just so happens, that according to my man maths the costs of carrying extra mortgage(as opposed to buying the equivalent property but without an annex building) for the period the inlaws are expected to be in there will be equivalent to the conversion costs. We could borrow the cash, do the conversion, but the net effect would be interest money going out of the family. If they pay us an appropriate lump up front, we don't need finance, we can charge them less, hopefully leaving more for all the siblings at the final reckoning or for the oldies to spank on cruises....
IsaacH so all siblings get equal cash, but we are the only ones to have to accommodate the oldies for 20 years? The others can buy an investment flat and rent it out, we get no rent and can't live in the property in the meantime, as Walm highlighted earlier in the thread.....
IsaacH so all siblings get equal cash, but we are the only ones to have to accommodate the oldies for 20 years? The others can buy an investment flat and rent it out, we get no rent and can't live in the property in the meantime, as Walm highlighted earlier in the thread.....
Edited by schmokin1 on Tuesday 23 February 19:40
Isaac
If it was a couple of years, no problem, I would suck it up. However, funding both the conversion of the building and the extra mortgage is totally unaffordable over what could be decades. I'm not going to have my kids living in penury to keep the inlaws in fine style when they can pay the costs from their house sale profit and still leave substantial sums to the siblings if that's what they want.
Walm's point will be covered by an agreement to repay what we gain in the short term if the olds die or move out shortly after moving in. We would rent out the annex in that case.
Cheers all
If it was a couple of years, no problem, I would suck it up. However, funding both the conversion of the building and the extra mortgage is totally unaffordable over what could be decades. I'm not going to have my kids living in penury to keep the inlaws in fine style when they can pay the costs from their house sale profit and still leave substantial sums to the siblings if that's what they want.
Walm's point will be covered by an agreement to repay what we gain in the short term if the olds die or move out shortly after moving in. We would rent out the annex in that case.
Cheers all
Again interesting posts guys.
As I see it, I have an absolute responsibility to my kids to give them a decent upbringing, with as many nice experiences as I can. Part of that will involve foreign holidays etc and the chance to watch Daddy sprinting or hill climbing a car at some point That will cost money.
I have an option to accommodate the outlaws too, but as they can well afford to pay a fair contribution I don't see why my kids, or indeed self and the boss should carry a financial burden to do it. Hence, having talked it over with SWMBO, we are going to stick to our guns, we think, and offer the annex on a cost neutral to us basis. If that ends up a borrow more, do it up and rent it back to them structure then so be it.
I do actually want this to happen as they are both fit, not in their eighties yet, and MIL in particular is heavily involved with the kids (by choice not coercion!).
I disagree talking about inheritance in advance is poor form. Better I think to plan ahead, get the oldies looked after, at the same time reducing the chance of a care home being needed for one or both. Money gives you options and opportunities for this stuff.
Btw , genii means several genies or geniuses
As I see it, I have an absolute responsibility to my kids to give them a decent upbringing, with as many nice experiences as I can. Part of that will involve foreign holidays etc and the chance to watch Daddy sprinting or hill climbing a car at some point
That will cost money.I have an option to accommodate the outlaws too, but as they can well afford to pay a fair contribution I don't see why my kids, or indeed self and the boss should carry a financial burden to do it. Hence, having talked it over with SWMBO, we are going to stick to our guns, we think, and offer the annex on a cost neutral to us basis. If that ends up a borrow more, do it up and rent it back to them structure then so be it.
I do actually want this to happen as they are both fit, not in their eighties yet, and MIL in particular is heavily involved with the kids (by choice not coercion!).
I disagree talking about inheritance in advance is poor form. Better I think to plan ahead, get the oldies looked after, at the same time reducing the chance of a care home being needed for one or both. Money gives you options and opportunities for this stuff.
Btw , genii means several genies or geniuses
Rangeroverover said:
The "Must Haves"
They have to be able to come and go without you seeing each other, we have totally seperate living and outdoor space, front doors etc, the only shared thing is a double garage, they keep their fiat panda in it and take up more space than my range rover. Other than that we can go days without seeing each other.
Think through what would happen if you and your partner were to split up, inevitably this would also cause the parents to move also. My in laws are both mid late 80s, the difficult bit will be when/if they can no longer drive or if they require care
Draw the line very early on about seeing each other, I never just walk into their house and vice versa. Small things will annoy you, mother in law is a hoarder and will not let me employ a cleaner so the kitchen that I spent time and money on is now in a really crappy state, lights are left on all over the house while they are out.
Mother in law seems to think that I am the RAC for any appliance she has that doesn't work.....would I do it again, if I'm honest I wouldn't
Got these covered. Don't mind fixing the odd washing machine! Ground rules about not coming over without an appointment are established! The two buildings are detached, are side on so don't even really overlook each other, have separate access, and I can't really complain about sharing garage space as there is loads and they have been storing some of my stuff for years anyway.....They have to be able to come and go without you seeing each other, we have totally seperate living and outdoor space, front doors etc, the only shared thing is a double garage, they keep their fiat panda in it and take up more space than my range rover. Other than that we can go days without seeing each other.
Think through what would happen if you and your partner were to split up, inevitably this would also cause the parents to move also. My in laws are both mid late 80s, the difficult bit will be when/if they can no longer drive or if they require care
Draw the line very early on about seeing each other, I never just walk into their house and vice versa. Small things will annoy you, mother in law is a hoarder and will not let me employ a cleaner so the kitchen that I spent time and money on is now in a really crappy state, lights are left on all over the house while they are out.
Mother in law seems to think that I am the RAC for any appliance she has that doesn't work.....would I do it again, if I'm honest I wouldn't
We are looking at the issue of providing them with a safeguard in the event we split up and have to sell.
DonkeyApple said:
walm said:
People generally are morons.
In particular they don't understand the first thing about finance.
Right now the siblings see their parents living in exactly that mythical rent-free property because they OWN THE HOUSE.
The whole concept of opportunity cost is 100% beyond them.
So all they see is THEIR INHERITANCE (the house) getting sold and then slowly whittled away by rent payments.
The fact that the parents should be able to invest the capital from the house sale in order to generate enough to cover rent isn't something the siblings could possibly begin to comprehend.
My father has constantly warned me over the years that children can be monumental tIn particular they don't understand the first thing about finance.
Right now the siblings see their parents living in exactly that mythical rent-free property because they OWN THE HOUSE.
The whole concept of opportunity cost is 100% beyond them.
So all they see is THEIR INHERITANCE (the house) getting sold and then slowly whittled away by rent payments.
The fact that the parents should be able to invest the capital from the house sale in order to generate enough to cover rent isn't something the siblings could possibly begin to comprehend.
ts.walm said:
DonkeyApple said:
But do remember that if it isn't your money that builds the annex then it isn't yours.
Rubbish.It would be totally up for debate.
Clearly OP would remain on the deeds.
It would be up to the siblings to argue that the funds weren't a gift to the OP.
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