My Mothers home to rent but how?

Discussion in 'Property Management' started by P j T, 3rd Jul, 2017.

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  1. P j T

    P j T Well-Known Member

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    Hi all,

    My family of 7 siblings has a situation we need to handle and I would like some advice please.

    My elderly father now has dementia (for some months but was still at home till last week being cared for by the 7 of us on a daily roster so as to take the load from mum). He had a stroke last Wednesday and will need assisted care for the remainder of his life. (We have that covered).
    My mother is now in a large 6 BR house by herself and has asked for help to down size but is not ready to sell. She is on a pension, no other income as dad go nipped with his super by his lifelong employer.
    The home in question is in a desirable inner west Suburb 6br, two living areas large modern kitchen , house in good condition. x6-7 parking spots . on a 1000sqm block. we are not far from a university and ask how can we lease out as multiple rooms with a common kitchen living area etc (we do not want to run a boarding house however) as this we hope would take mum off the pension and provide her an income for the remainder of her time. ( would this have the potential to provide a higher rent return)?
    The other option would be a single tenancy.


    My folks have never enjoyed money, having raised 7 kids on a minimum wage but made sacrifices to provide us quality education etc, we are eternally grateful. In payback, we have grown up with no stupid vices or have gotten into trouble or burdened them with requests for handouts - ever , we have made our own way in life. We now have the blessed opportunity to look after them without complaint which is our honour and pleasure. all 7 of us are on the same page as to their ongoing care and welfare.

    Any sage advice as to above?
     
    Ouchmyknees, Propagate and Perthguy like this.
  2. Phase2

    Phase2 Well-Known Member

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    I don't see how you'll lease 6 rooms without it being a boarding house...
    Can you divide the house internally? Say 3 beds, with the kitchen and 1 living space and create a kitchenette (using a bedroom?) with 2 bedrooms? Rent under 2 leases?
     
    P j T likes this.
  3. Propertunity

    Propertunity Well-Known Member

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    You are describing a boarding house :(
     
  4. Propertunity

    Propertunity Well-Known Member

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    Perhaps consider selling and downsizing for your mum? Investing the left over house sale proceeds.
     
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  5. babyboomer1

    babyboomer1 Well-Known Member

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    Hi Peter,
    If i were you i would consider your mum coming to live with you even if it is a week each. Centrelink will be able give you an idea of how long before you are forced to make a decision (it maybe 2 or 5 years) about the house as it is now considered as an asset if your dad is in assisted care although i think if your mother was nominated on the title deeds you do not have to make that decision just yet.
    The other choice is try and rent the property it might be better if she is not there as the tenants may not take of the house as she would.
     
  6. PandS

    PandS Well-Known Member

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    Sell the place build her a granny flat on one of your properties
    let her spend the left over and you care for her till she departed
     
  7. thatbum

    thatbum Well-Known Member

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    I'd do some careful research before making any moves.

    Our pension and tax system might mean that the best financial decision for her might actually be to stay put in her house for as long as she can.
     
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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    The other thing to consider is funding of his nursing home Bond and the impact it will have on your mum's $

    Specialist advice is required
     
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  9. Marg4000

    Marg4000 Well-Known Member

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    This is sometimes not straightforward.

    If the property is in joint names, husband's share may have to be invested for him and affect nursing home charges.

    Suggest getting specific advice before considering a sale.
    Marg
     
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  10. Tonibell

    Tonibell Well-Known Member

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    Just been/going through this for Dad - funnily enough with 7 siblings also.

    A lot of it is about retaining pension, support and health benefits.

    Is there a family member that can move in to the house ? Has a lot of benefits if there is - possibly can do it with a carers pension.

    For us we did a reverse mortgage type product for living expenses.
     
  11. Joynz

    Joynz Well-Known Member

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    The most important thing is what does your Mum want to do re. the down sizing?

    Is she wanting to rent a smaller place due to the upkeep or be closer to your Dad?

    The post mentions the aim to 'take Mum off the pension'? Is that her goal? Is she wanting a lump sum so she can travel?

    There is a great book about retirement houseing choices called Aged Care Who Cares? By Rachel Lane.

    It shows that the cheapest choice in aged care is not always the most affordable once you take tax and pension eligibility into consideration.
     
  12. P j T

    P j T Well-Known Member

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    To all,
    thank you for your advice, we now have plenty to consider. We have discounted the " boarding house" option and will call in a ''trusted'' local RE this week to discuss other options. (Sale or to lease out).
    With the nursing home, we have that in place and the refundable bond deposit is covered. Also we would avoid at all costs a reverse mortgage as we consider these a poor alternative due to interest rates charged.
     
  13. P j T

    P j T Well-Known Member

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    Thanks I will try and find a copy.
     
  14. neK

    neK Well-Known Member

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    Have the whole family move into the house instead - your mum will probably be happier that way :)

    Maybe see if the house can be converted into two houses and have another family member live there... so that your mums gov benefits aren't affected.
     
    Last edited: 4th Jul, 2017
  15. Miss_D

    Miss_D Well-Known Member

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    Make sure you have a power of attorny in place for your dad, incase there are financial and medical decisions that have to be made for him! If you dont have one, get it done now! Also make sure your mum has one as well, because if something happened to her, someone will need to act on her behalf.
     
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  16. wylie

    wylie Moderator Staff Member

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    It possibly is too late for your father to be able to set up a power of attorney (depending on his condition of course). I'm sorry to hear about this situation your family is in.
     
  17. P j T

    P j T Well-Known Member

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    Hi Wylie,
    We have had dads POA set up for some time, this happened when was first diagnosed with dementia and he was aware he needed to have this sorted.
    Our primary option would be to sell and have Mum buy something smaller or to rent with a long lease, or alternatively to have her rent the house out and live with one of the family till she goes into assisted care as well.
    At present dad is still in hospital and not leaving anytime soon .but once released will be straight into assisted care.
     
  18. wylie

    wylie Moderator Staff Member

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    I'm guessing it is an Enduring POA?

    Your option of having your Mum rent the house out and buy something smaller or live with family until she needs assisted care sounds good (and I would guess will depend on how long she may be able to stay out of assisted care).
     
  19. Tonibell

    Tonibell Well-Known Member

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    You only pay interest on the amount drawn down - so it is a good backup and great for independence. We went with CBA and current rate is just over 6%.

    The other thing is access to funds without it effecting pension calculations - unlike the instance where you sell and downsize.

    But as always - individual circumstances are always different and need to be considered.
     
  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I would suggest you consider avoiding having the property sold, especially if it is a pre-CGT property.

    If need be the kids can help mum out by renting a property for her and paying the rent, or mum moving in with someone. Or even mum renting a property owned by a child with the rent paid by all the kids.

    Keeping the house means mum could use the 6 year rule and it avoids transaction costs. If preCGT there will be no CGT anyway.