Buying house for CASH from Son-Letting it out to His ex-Subsidized rent.

blindman

_shel said:

blindman said:

Just to be clear 

We are all good friends.
The kids are our Grandkids...

I know things can change.

If she is on benefits now or in the future it is highly unlikely she would receive benefits to pay the rent.

She is not on benefits.

blindman

greatcrested said:

blindman said:

Comms69 said:

Lover_of_Lycra said:

blindman said:

Things would be formalised.
Thanks for the bit about deprivation of assets.
Hopefully a long way off that scenario.

Sorry what is SDLT?

Know about CGT

Cheers

Stamp Duty Land Tax.

If you're buying the property from both of them and then letting the property to the ex this could be in the realm of sale-and-rent-back which is regulated by the FCA.

As well as issues with the type of tenancy created 

This is the info I am looking for.
As far as I am concerned it is purely a financial deal which suits all.

She gets a rental property, son gets his share (and moves out of my housr)

I get a pension investment.

Property will be in wife's name,all rental income is hers 

My wife has no income for the next two years 

Umm... please explain.I thought you started by saying

House is 4 miles from e if that's relevant.
I own my own home which is mortgage free.
So my plan is to:
BUY in CASH their home.
Give son his share.
Allow his Ex + kids to live there.
They pay me rent (reduced for Friends and Family ) )

So who is buying this house?

If she is on benefits now or in the future it is highly unlikely she would receive benefits to pay the rent.

Indeed. Especially since "They pay me rent (reduced for Friends and Family )

OK

Thanks for all the replies so far.

I was typing on the phone (which I hate) so may have been not clear with the situation.

To Recap
Son and Partner (not married) bought their house with mortgage of which they have an equal share (they pay into equally) and (pre Covid) were employed.
Had two kids.
Kids go to local nearby schools.

Son left all of the above (moved into my house!). He pays maintenance, his share of the mortgage and has the kids on regular intervals.
We all have regular meet ups\dinners etc My daughter babysits the kids regularly,

Me
Own house outright.
Wife has no income until she's 66.
I can afford to spend ALL my savings to buy this house.
We can live off various pensions ongoing and upcoming.

So 
Son wants to move on with life and ( I want him to move out!)
Partner wants to live somewhere she can afford.

I want to invest in something that is better than 0.0000% interest rates

So 
Plan is to
Buy their house (Lower stamp duty-No estate agents fees-We know the area...)
Give son his share-Get him to move out. of my house
Give partner her share.
Let her live their -if she wants- Reduced rent so she can afford it

If she moves in a new fella -No problem-May affect the rent....
If at the end of Furlough she is not employed -ie No rent to me- Not an issue- I am providing for my grandkids.

All of the above will be OFFICIAL- I;m generous but no fool.

What could go wrong??

AnotherJoe

The main thing that coudl go wrong is that she falls on hard times and cant pay you any rent.

But you are "happy" to cope with that situation.

I say go for it, if you do it now its just the extra 3% SDLT you'll have to pay.

 

babyblade41

I don't think I am understanding this correctly.

My understanding is that if the ex has sole care of the children then won't your son have a duty of care towards the children  and keeping a roof over his children's head and pay for it.

Things may be different now but I don't understand why the house can't be sold , proceeds split equally and the ex finds a rental property and your so pays a certain amount of that rent to provide for his children 

Again I would stand well clear as sooner or later the ex is going to get some legal advice and your well intentioned proposal could cause mountains of grief 

ETA you are on a loss from the start with the extra SDLT ... has a valuation been done on the house already so full market price will be paid 

onwards&upwards

Her moving a partner in might affect the rent.  

Hmm, there’s a potential cause of upset further down the line.

Comms69

babyblade41 said:

I don't think I am understanding this correctly.

My understanding is that if the ex has sole care of the children then won't your son have a duty of care towards the children  and keeping a roof over his children's head and pay for it.

Things may be different now but I don't understand why the house can't be sold , proceeds split equally and the ex finds a rental property and your so pays a certain amount of that rent to provide for his children 

Again I would stand well clear as sooner or later the ex is going to get some legal advice and your well intentioned proposal could cause mountains of grief 

ETA you are on a loss from the start with the extra SDLT ... has a valuation been done on the house already so full market price will be paid 

Where did you get those ideas from?...

AnotherJoe

babyblade41 said:

I don't think I am understanding this correctly.

My understanding is that if the ex has sole care of the children then won't your son have a duty of care towards the children  and keeping a roof over his children's head and pay for it.

Things may be different now but I don't understand why the house can't be sold , proceeds split equally and the ex finds a rental property and your so pays a certain amount of that rent to provide for his children 

Again I would stand well clear as sooner or later the ex is going to get some legal advice and your well intentioned proposal could cause mountains of grief 

ETA you are on a loss from the start with the extra SDLT ... has a valuation been done on the house already so full market price will be paid 

From the OPs perspective, if that's what the couple did then the partner would need to find somewhere still in school catchment and rent that. That would seem not to be affordable so OP would be topping up the rent to avoid disruption to the grandkids. Plus son might have to pay more making it less likely he can afford to buy somewhere else (and thus move out)
One thing you could look at OP, is a smaller house available nearby you could buy instead?  Eg say they are currently in a  4 bed detached and could move into a 2 or 3 bed semi or terrace. 

blindman

Thanks for all the replies so far.

The house is valued at £180.000 so SD would be £5400.

Son has duty of care and is paying maintenance which will continue.
If he cannot move out of my house then so be it  (for the time being).
The house is 3 bed terrace and this is the type his Ex would need for the kids, so if I buy the house I have solved that issue for her and I have an investment property.

blindman

babyblade41 said:

I don't think I am understanding this correctly.

My understanding is that if the ex has sole care of the children then won't your son have a duty of care towards the children  and keeping a roof over his children's head and pay for it.

Things may be different now but I don't understand why the house can't be sold , proceeds split equally and the ex finds a rental property and your so pays a certain amount of that rent to provide for his children 

Again I would stand well clear as sooner or later the ex is going to get some legal advice and your well intentioned proposal could cause mountains of grief 

ETA you are on a loss from the start with the extra SDLT ... has a valuation been done on the house already so full market price will be paid 

The house will be sold-to me.
Proceeds will be split equally 
Ex will rent the house from me
Son will pay his maintenance to Ex.
Icing on the cake:-
Son finds another partner to share a rental home and moves out

House is £180,000

Comms69

But will you actually make money on it? Reduced rent + costs generally means less profit. 

£180k in cash could easily be better invested. Hell lego sets would be a better investment than the potential drama once she has a partner.