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Renting a property to a parent
Posted on 7/17/14 at 10:38 am
Posted on 7/17/14 at 10:38 am
Anyone have any experience with this?
Parents are separated amicably, Dad has been renting a place but is ready to buy something small.
Financial situation is extremely stable (retired very well) but already has a beach place with a mortgage in his name so there would be no tax benefits for buying.
He's offering to gift me 20% down for a roughly 250k condo in Atlanta in a very stable/well known building. He will then pay me market rent.
I know the default answer is going to be NEVER DO DEALS WITH FAMILY, but is there anything particular here I need to watch out for.
Parents are separated amicably, Dad has been renting a place but is ready to buy something small.
Financial situation is extremely stable (retired very well) but already has a beach place with a mortgage in his name so there would be no tax benefits for buying.
He's offering to gift me 20% down for a roughly 250k condo in Atlanta in a very stable/well known building. He will then pay me market rent.
I know the default answer is going to be NEVER DO DEALS WITH FAMILY, but is there anything particular here I need to watch out for.
2
Posted on 7/17/14 at 11:35 am to jso0003
quote:
Financial situation is extremely stable (retired very well) but already has a beach place with a mortgage in his name so there would be no tax benefits for buying.
You can deduct mortgage interest on two personal residences (provided you don't reach the total debt limitation), and real estate tax on as many as you have.
I see no benefit from your dad of renting from you, unless he plans to stiff you on the rent.
As for you, if your dad doesn't live there anymore, do you want to be a landlord to someone else, and will the market there support a nice tenant?
Posted on 7/17/14 at 12:43 pm to jso0003
quote:
but already has a beach place with a mortgage in his name so there would be no tax benefits for buying.
As I understand it, you can federally deduct multiple properties, you just won't qualify for the state's homestead exemption.
Posted on 7/17/14 at 2:19 pm to Lsut81
quote:
you just won't qualify for the state's homestead exemption.
Indeed, but, the property won't qualify for a homestead exemption as rental property, either.
Posted on 7/17/14 at 3:46 pm to LSUFanHouston
Yea so it sounds like I'd have to rent it unofficially, which leaves me pretty exposed to a multitude of issues.
Going to nip this idea in the bud I think.
Going to nip this idea in the bud I think.
Posted on 7/17/14 at 4:24 pm to LSUFanHouston
You said your parents were "seperated amicably". Does that mean they are legally divorced?
If they are divorced, I don't see why he would not just want to buy the condo himself.
If he is still legally married to your mom, there may be reasons he doesn't want to acquire property quite yet. You need to stay the heck away form this situation if this is the case.
If they are divorced, I don't see why he would not just want to buy the condo himself.
If he is still legally married to your mom, there may be reasons he doesn't want to acquire property quite yet. You need to stay the heck away form this situation if this is the case.
Posted on 7/17/14 at 6:18 pm to LSUFanHouston
Yea they are not legally divorced, sounds like a way to stash $$$ with me.
Posted on 7/17/14 at 9:54 pm to jso0003
quote:
Yea they are not legally divorced, sounds like a way to stash $$$ with me.
I would tell your father you love him, as you love your mother, and you will help him where you can, but you cannot and will not get between them financially.
As someone who had their parents divorce when I was an adult, trust me, you want nothing to do with this.
Posted on 7/18/14 at 10:06 am to LSUFanHouston
quote:
As someone who had their parents divorce when I was an adult, trust me, you want nothing to do with this.
Thanks for the advice
Definitely a weird situation.
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