Pros and Cons of Dual Living

Injecting Funds Into a Family Member's Home

Actually I have a good topic from a discussion I was privy to the other day, namely the concept of parents living with their kids and injecting money into that property. There are many up sides to this idea, for example, extending the home giving more space for the parents to live, being on hand when the children come home from school, sharing the overheads, caring for the parents as they age and so on.

But despite these advantages, I  would like to be the devil’s advocate and address the “what if” factors especially when this decision can be very binding in the future.  Lots of thoughts come with this concept, as well as arguments in the future, especially if circumstances change. It is hard to look into 4 or 5 persons lives 20 years hence.

Dual Living Options

In the main dual occupancy is a great idea. Having said that, I recommend that all of the factors that can crop up be thought through carefully and if necessary legal documents drafted and ratified to prevent squabbles when unforeseen things strike. Here are some possible options for dual occupancy (most of which would require Council approval):

• Add a granny flat adjoining the existing building, or build in underneath the building
• Split the home into two self-contained areas.
• Utilise the rumpus room.
• Erect a relocatable building onto the land.
• Extend the existing home.

Problems Can Arise

The tricky part of investing capital into another’s house, without a separate deed, those improvements will belong to the registered owner of the land. Always consider the obstacles, as the minor party will be the most at risk should circumstances change.

• The partnership splits (divorce/disagreement).
• One person gets ill, or loses their job making repayments a burden.
• Other circumstances change
• One person wants to be bought out as they need their capital for things like:
  • Relocatation
  • Change living arrangements due to job, ill health or nursing care.

The ultimate decision in the worst case scenario would be to sell the whole property and split the capital proportionate to the money invested.

Course of Action

If you ask me what I would do:

• If it was my property I would pay for the extension and charge rent.
• If I was the parent moving in I would not expect the capital back, and expect free rent.
• If I expected the money back I would try to buy a home close to my kids to avoid the commitment.