Investing in a property

mlz1413

OP you say a 3 way mortgage sounds messy, but a think a deposit from mum, mortgage loan from you, mortgage payments from brother and rental agreement to brothers partner is not messy?!?

so much could go wrong with the above, who pays repairs, who replaces carpets, who can pay mortgage if brother cannot work, what if one of you dies?

Ultimately you need to decide if the money is going to be needed, ie does your mum need money to help pay the bills at retirement? does she want to downsize now she is disabled and on her own? will she need a different bed and /or a stair lift etc etc due to disability.

If the money will be needed then put it into ISA / savings account and spend it as needed.

If you don't need the money and it won't be missed when you don't have it then that's fine to invest as you wish, have a chat with a solicitor before buying so you know the best way so protect everyone involved in the house purchase.

Fly_Baby

spakkle wrote: »

i am 10000% sure my brother would not see his 4 yr old daughter out on the streets so this is a minimal issue, so should they split, who ever has the daughter; has the house. (makes her sound like a piece of furniture lol but you know what i mean!)

Not meaning to sound mean , but are you suggesting that in the event of the split, should your bro's GF become the main carer for their child - as is usually the case - then she effectively gets the house? I.e. walks away with all of your mother's money and all your mortgage contributions?

The whole affair sounds really risky in terms of potential future implications. They are not even married. Unless the initial purpose of this project was to house your brother and his GF and not to up your mother's inheritance and invest your spare money.

ManicMum

Hi there

I think your intentions are good in that your Mum and yourself are looking to help your family out. This is a natural instinct but echo what some other people have said. this sounds very complicated and fraught with 'what ifs'. What about your Mum buying a BTL property herself and renting it to non-family members? Then she could make a decent profit and get a return on her 12k. I know that wouildn't help your family out though.

There may also be a day when your Mum might need some of that 12k. I personally wouldn't tie it all up (unless I had other savings).

sorry!

spakkle

Hiya
thanks again for all of your comments. I think i am thinking it may be a little too complicated and maybe a disaster waiting to happen. I have been thinking about investing in a second property for about 3 years for family to rent out, and thought that maybe my mum could do it instead was a nice thought, but maybe i was being over-adventurous.

Knowing my family, it seems so simple, but im never one to go into anything without looking at all angles and opinions.

I also thought about her maybe buying a little work-from-home business, which could get her off benefits and give her something to get up for in the morning, which i personally would love, but also know they don't really exist. any ideas here would be great....

Bufger wrote: »

This concerns me. How about just letting your mother have the money she was left and letting her do what she wants with it? after all she was married to the man.

When it gets too complicated it gets messy. Different people have different deeds and rights and one ends up holding it against the other. Unless your family is completely watertight i can tell you this will all end in tears.

Your mother is best choosing what she wants to do with it.

Hiya, our family are watertight, always have been, and losing dad brought us even closer together, but i do know that if anything can tear even the closess families apart its money, ive seen it..

generally she wants for nothing, she doesn't even feel this money is hers no matter how much we tell her it is. Given her the choice, she would give it to us kids, that way, it would just disappear (spent on possibly 2k cars etc that wouldn't be worth anything in 12 months time) and this will not help her in 5-10yrs time. I know that may make put a temporary smile 'now' and it is her money like you say, but i know she will want it in a few years time, and i cant have her just give it to us.

I do agree with the 3x people gets messy and will most probably cause rows, is why i was possibly thinking me and mum going for a property, she as silent investor, ill take the mortgage in my name, and my brother just renting which gets him out of the council house he is in, in an area he doesnt want to bring his daughter up in (he has been on the exchange list for 2 years but no one wants to move to his area either).

I do question the ethical standing of renting a council house, yet investing in another house, but ethics seem to be in short supply.
I'm not renting, i am in my own mortgaged property, my brothers girlfriend is in council (that doesn't even have central heating upstairs). if we went ahead with this, she would be leaving council-rented. I take it you mean why is my mum renting but may be able to invest in something else, i agree with the ethics thing and am totally on your side, as my mum is on benefits (disabled) she would we looked into her getting a mortgage herself to buy herself a property for herself to live in (see below, i spoke to an FA about this). Its just a way for this money to mean something, for it to do something, and for my mum to (from my intension's) hopefully walk away with even more cash so she could buy a caravan or something outright in a few years time. My youngest sister (her now carer) has her driving test on Thurs which we've all chipped in for so mum is mobile again and not stuck in the house, and can maybe just go on holiday to a nice caravan somewhere when ever she wants, and possibly rent that out etc etc.

does she want to downsize now she is disabled and on her own? will she need a different bed and /or a stair lift etc etc due to disability.
she doesnt want to move, thats 100%, when my dad got ill i really wanted them to move to a bungalow but my mum refused, as the house she is in now is where her kids grew up, and she cant bear to leave it (she is very sentimental and things like that mean so much to her) and is ultimately where my father died, so it will be a long time before she will want to leave that place. She isn't on her own, my dad used to be her carer, and when he got ill my youngest sister and her boyfriend gave up their flat to move back in and take care of her, and does an amazing job. my mum will never go without, if she needs a stairlift, us kids will make sure she gets one, it wouldn't seem right for this money to go on things like that, I'd rather her invest it for the future somehow and ill pay out of my own pocket for disability aids should she need them in the future.

Not meaning to sound mean , but are you suggesting that in the event of the split, should your bro's GF become the main carer for their child - as is usually the case - then she effectively gets the house? I.e. walks away with all of your mother's money and all your mortgage contributions?
how would she get the house if the deeds are in my or my brother name (Dependant on what/if anything is decided). there would either be a rental agreement in joint names (if the house would go in my name). if they split she would have no claim to the house apart from whats stated in the rental agreement.

What about your Mum buying a BTL property herself and renting it to non-family members? Then she could make a decent profit and get a return on her 12k. I know that wouildn't help your family out though.
I did speak to a financial advisor about this, and he said she could get one based on the pensions she will get from my dad as its guaranteed income, but we are not sure there is enough for this, also, i know a few people that own properties and rent it out, and have nothing but stress and worry, and if it wasn't for the housing boom, they admit they wouldn't have bothered, or would prefer to rent to someone they know. I know my experiences do not reflect every case, but i would be hesitant for my mum to shoulder this in her name only, take the full risk on her own, and be ultimately and solely responsible. I will speak to him again about the possibility of her getting BTL (but ensure she wont shoulder it on her own if something goes wrong)

I know she loves the thought that this money (that she doesn't even really want right now) could help her youngest son and only grandchild, puts a rare smile on her face, in which i totally see, but i know she will want this money one day.

I agree with the 'whole of the money'. and maybe an isa or something is a better idea.

Fly_Baby

spakkle wrote: »

how would she get the house if the deeds are in my or my brother name (Dependant on what/if anything is decided). there would either be a rental agreement in joint names (if the house would go in my name). if they split she would have no claim to the house apart from whats stated in the rental agreement.

OP, you said so yourself - which made me wonder in the first place.

spakkle wrote: »

the rent agreement would be in his girlfriends name, as they have a daughter together, (they are living in council at the moment and the tenancy is in her name and always has been) i am 10000% sure my brother would not see his 4 yr old daughter out on the streets so this is a minimal issue, so should they split, who ever has the daughter; has the house. (makes her sound like a piece of furniture lol but you know what i mean!)

She might not have any legal rights - although I am not sure about this either as they will be living in civil partnership - but try evicting her with a child, should you need to release the money or if she becomes a bad tenant.

I don't mean to say anything bad about your brother's family - God forbid! - but unfortunately life can throw in a couple of nasty surprises, especially when relationships fall apart. One can very rarely be 100% certain of how the other half would act once they are no longer together.

Just wanted to advise to be careful (especially where a non-family member and a dependent child are involved), that's all.