Making Room for Mom and Dad
Over the last few months, I have run into several clients in the Northeastern US who have discovered a need to manage the aging and changing mobility of their parents. This is not a coincidence anymore, but a real, actual need that many people are experiencing. It has become incredibly important to manage our immediate family and finances together, while ensuring the safety of our parents. It makes it especially difficult since the markets have plummeted and our collective portfolios are worth 50% of what they used to be.
What advantages can be sought by this event, and how many arrows can one carry in their quiver to ensure that the options are the best for everyone involved? Let's take aim at being able to spend less, keep family close, and improve your overall position when it comes to your investments.
The in-law suite or "casita," as they call it in the Southwestern US, has become a popular request on home searches. Being able to finance a detached structure in a new home purchase can be a challenge depending on its maintenance level, but typically it is easily included in a mortgage without any additional costs or rate increases.
So are you interested in moving to accommodate everyone? Call your trusted Realtor and put together a search for the home with the in-law suite. Be prepared to look at a lot of different options and keep in mind things like stairs, and private kitchens & baths. There is something to be said for making a fresh start so if a move is something your family could use, go for it!
But, what if you are perfectly happy with your current location? Additionally, how do you position your parents in your home that may not have these additional features? The cash required to build an addition or a detached structure could break the bank if you get carried away with upgrades. Ease of access to plumbing and electricity lines may pose a challenge from the main home. Additional challenges may be town/city permitting, easements and set backs which all come into play. It would be best to speak to a general contractor before venturing into it on your own. More importantly, where is the money going to come from? Here are a few choices.
With rates being so inexpensive, you could refinance your own home and cash-out for "home improvements,” to include remodeling and adding the in-law suite. Putting the money back into your home is not a bad idea in this market. You may see a great return as demand for homes with this in-law feature continues to rise. If you are a naysayer and believe the market could tumble another 15-20%, then this may not be for you. At this point, however, prices are back to fair and this is the market correction that has made Real Estate, “real” again.Continued on the next page