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Buying a home but have parents rent it?

Started by TacosAndBurritos, January 13, 2019, 10:30:36 PM

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As evil as it sounds, it's not (I think). My goal is to rather help my family than make a profit, win-win situation. Part of me feels a bit guilty for trying to profit from my family and proposing such idea.

My parents and two siblings live in an apartment. It's obvious the space is too small for them, rent goes up, and my parental unit is not going to buy a home in their life's (previous home was foreclosed a bit after the Great Recession). I have some cash saved up and figured out renting to my family would be a good way to help them out and I would benefit from having a reliable tenant for my first home. They would get more space+back yard+no upstairs neighbors for about the price as their current rent, or less. My dad loves to fix stuff and I know my family does not consist of hoarders or problematic folks. In addition, if their hours get cut they would not need to worry about late fees and the money stays in the family instead of some corporate landlord. When the inevitable happens, in 10-15 years, I plan on continue to rent the home.

What do you all think?


The best way to stay wealthy is to keep the family money circulating WITHIN the family!

Hence why I'm motivated to keep my online business going. With a business, we depend less on outside forces. I love the independence.



I don't think your idea sounds evil. The one thing is would they actually be willing to pay you? Families can be weird with money, but that's not to say it has to be. If they're on board your idea sounds thoughtful and cool imo.


I had a friend that did this and it's working well for him. The only odd part is with his high school friends when they ask where his parents are living (as his childhood home is clearly no longer where his parents are living). He avoids bringing up the topic that he owns his parents home to avoid the fact that he can afford two mortgages.

I would strongly suggest talking through your plan before you buy something. Explain your rationale. You hopefully live in an area where it makes sense to buy vs rent if you qualify for a prime mortgage. Your parents whether they want to or not may not qualify for the same rate. Explain that you think this house is a good investment and your expected return (rental yields less Costs plus appreciation). You can explain market rent is X (you can use Zillow's estimate as an impartial third party), but you are willing to rent to your parents for less. Not out of charity but to avoid the property management cost (roughly 8% of rent).  That should make it a win win and don't make it charitable. Add in vacancies, brokerage fees to find a tenant and tenant late fees/eviction charges to round out the numbers to make it work.

If you do proceed - run it like you rented it out. You should buy property insurance. You need to pay property tax and the HOA if you have one. Agree which utilities they pay and which you pay (I would suggest following what your parents currently pay for in their rental..


You know your parents best so you can either couch it as "Hey, I'd like to give you something back so please come live with me" or "Please help me out and live here and provide a little help with the mortgage" depending on which you think appeals to them better.


If they're willing and you have the means, this sounds like a wonderful win-win idea to me. Please let us know how it goes if you end up doing it! Best of luck