Hello,
I am currently in a somewhat complicated situation and am seeking advice here.
The situation is as follows:
My wife and I are currently renting, but we want to move back to our hometown sometime this year or next.
There, as in many other parts of Germany, the real estate market is very tight. In other words, extremely high purchase and rental prices for properties that aren’t really worth that much.
Since we have been looking for a suitable property to buy for quite some time without finding anything appropriate or only finding grossly overpriced options, we have considered moving into the original family home where my father currently lives alone.
In order for us to move in there, it would be necessary for my father to find a 1-2 bedroom (or 1-2 room) apartment for himself. Our idea was that we would act as buyers for that apartment and then rent it to my father.
At the same time, we would move into the family home as tenants and pay rent to my father.
My father would grant us the first option to buy the house, and we could later decide whether to take over the house or not.
Of course, he could also sell the house to us directly at a reasonable price now, but the problem here is:
1. There are still outstanding debts on the house.
2. I have two brothers who also need to be considered. In other words, a gift in this sense is currently difficult without anyone feeling overlooked.
Therefore, the rental model has the advantage that over the next few years, during which our income situation is uncertain (family planning/moving/job changes), we would not face such a high financial burden. Buying an apartment for around 200,000-300,000 euros (approximately 220,000-330,000 USD) is much more manageable for us than purchasing a house for 500,000-700,000 euros (approximately 550,000-770,000 USD).
Additionally, if I understand correctly, when renting to a family member, it is possible to save on taxes (reduce deductible expenses?), although it must be noted that at least 50% of the local market rent must be charged.
Does this make sense?
Have I overlooked something significant?
Or is there perhaps a better solution we haven’t thought of yet?
Thank you very much for your help.
I am currently in a somewhat complicated situation and am seeking advice here.
The situation is as follows:
My wife and I are currently renting, but we want to move back to our hometown sometime this year or next.
There, as in many other parts of Germany, the real estate market is very tight. In other words, extremely high purchase and rental prices for properties that aren’t really worth that much.
Since we have been looking for a suitable property to buy for quite some time without finding anything appropriate or only finding grossly overpriced options, we have considered moving into the original family home where my father currently lives alone.
In order for us to move in there, it would be necessary for my father to find a 1-2 bedroom (or 1-2 room) apartment for himself. Our idea was that we would act as buyers for that apartment and then rent it to my father.
At the same time, we would move into the family home as tenants and pay rent to my father.
My father would grant us the first option to buy the house, and we could later decide whether to take over the house or not.
Of course, he could also sell the house to us directly at a reasonable price now, but the problem here is:
1. There are still outstanding debts on the house.
2. I have two brothers who also need to be considered. In other words, a gift in this sense is currently difficult without anyone feeling overlooked.
Therefore, the rental model has the advantage that over the next few years, during which our income situation is uncertain (family planning/moving/job changes), we would not face such a high financial burden. Buying an apartment for around 200,000-300,000 euros (approximately 220,000-330,000 USD) is much more manageable for us than purchasing a house for 500,000-700,000 euros (approximately 550,000-770,000 USD).
Additionally, if I understand correctly, when renting to a family member, it is possible to save on taxes (reduce deductible expenses?), although it must be noted that at least 50% of the local market rent must be charged.
Does this make sense?
Have I overlooked something significant?
Or is there perhaps a better solution we haven’t thought of yet?
Thank you very much for your help.
pagoni2020 schrieb:
Only afterwards and incidentally is the equally entitled mother mentioned. This raises the question for me why such an important point (the security of the co-owner mother) was missing until now.
Then I read about the "evil brother" and his completely exaggerated expectations while at the same time the market price is being driven down so far that it suits one’s own wallet. Where is the difference there, please? At least not before the comma, you’re right about that ;-)
pagoni2020 schrieb:
In the end, despite his drastic reduction, the father can only make a substantial down payment on his small apartment, so despite his significant setback, he will still have debt on it and won’t even live there rent-free. I’m just saying, a retirement house. The older owner transfers the farm, the younger one ensures worry-free living for the elder. That’s the only fair way.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
pagoni2020 schrieb:
So the original poster (OP) themselves recognizes the lack of a "fair and equal solution" and now wants to resolve it in a somewhat "fair" way (which the brother also wants... 😀 ). A truly fair financial solution would be possible, but it is too expensive or not feasible for the OP. So financially it automatically becomes unfair in order to make it work for them, because a partly fair solution does not exist.
In the end, despite his significant downsizing, the father can only make a "generous down payment" on his small apartment; so even with his major step back, he will still be in debt and will not even live rent-free. Quote: "... which should at least still be enough for a substantial down payment on an apartment for my father"
What is completely taken for granted here and pushed into the background: inheritance basically happens only A-F-T-E-R death. Only then is it an obligation; before that, it is understandable wishes! I totally agree with you.
In a forum, you can only address a situation as far as the information is provided.
How the information flows, when something is mentioned casually or not, which questions are answered or overlooked – but to keep it simple: you don’t have to read between the lines, but you can infer quite a bit.
It may also depend on whether someone has personally experienced or openly seen many things (elsewhere) or whether one can only "see" within their small circle and situation.
If emotions are even present, they are nicely softened. It is more about trying to secure a lot financially for oneself.
Hopefully, the money for the father will be enough for his dream: a one-room apartment plus a camper. I’m curious whether the mature gentleman will eventually seek advice about his situation in a forum – it wouldn’t be the first time both “parties” have coincidentally met here 😎:p
I think if the OP himself were at his father’s age and in his situation (he will probably have children someday), he would understand what @pagoni2020, I, or another critic meant. I wouldn’t wish it on anyone.
saralina87 schrieb:
If he wants to secure his own care, that is his choice. Not if he is under pressure from sons expecting to inherit something.
BackSteinGotik schrieb:
Briefly and exaggerated with your example – everyone should slave for me, and clearly take care of me. No, no one should slave; it’s just about keeping financial resources where they can actually be used for care.
P
pagoni202020 Mar 2021 14:37@saralina87 Exactly, all or nothing, otherwise you get complaints that aren’t worth any amount of money in the world.
We are also familiar with the sometimes self-neglecting tendencies of elderly people when they see their children and grandchildren. Parents are not strangers to whom you can later say: "Well, Mom and Dad... you signed it, you should have paid more attention." If we want to even use the word family here, then the values and basic principles that come with it should be taken into proper consideration. For example, my parents would have blindly signed anything from me; but that alone would not necessarily have been fair or decent, which is why they went to a notary and I signed what he had carefully prepared as necessary and appropriate. But I also could have refused to sign. The primary focus was, first and foremost, their well-being and a great rent-free apartment for them!
No one says that, and I don’t think that even remotely. We have four children together; everyone goes their own way and no one would ever think of attacking us. Once both of us are gone, everything will be divided; we have a will, and all children are informed. If the topic of care comes up and I can still decide, it will be changed so that whoever provides care will gain a very clear advantage. Since I don’t know our future life or aging needs, I will not reduce our property. Isn’t that understandable from our point of view? As soon as I have anything left over, the children will come first... they already have in part, just in case my viewpoint comes across as harsh. I would rather call it "responsible," at least that is our intention.
Of course – they know everything they need to know, including how and where their funeral should take place. All without putting them under unexpected obligation.
True, that’s not good and leaves room for trouble later. But you forget that this is about a – BEFORE – and not about the eventual inheritance. That would be very simple and 100% fair to resolve here. When both parents have passed, the house is sold and the proceeds divided equally or someone buys the house at the mutually agreed price. But that is not the issue here; here, someone wants something cheaper and that will be the problem.
Absolutely! That’s what I am talking about: “transferred” AND “settled,” with emphasis on “AND”! Settling also means taking on the responsibilities of the younger generation. That’s how it was and still is on the farm. Here, only the “giving” side is considered and the importance of “settling” is pushed aside.
In our large family, there are two farmers; everything has long been transferred and settled. The parents still live IN the house and are cared for and supported by the younger family. Great solution, then the model is perfect again.
@BackSteinGotik Thanks first for your answer.
There was also a "complicated situation" in my childhood in the 1960s. Looking back, those post-war years shouldn’t be romanticized nor should today be seen as too bad. I believe that “back then” many opportunities such as education, health, property ownership, housing, and change were far less accessible than they are today, and only possible for a smaller part of society.
😀 I’m getting that right: No, of course NOT. But I also don’t see many young people really “working their butts off” for their parents...!
Sometimes the strain might come from stressful home office work, mixed with house building forum, espresso, fresh air thanks to controlled ventilation, etc. Unfortunately, my father didn’t have Stalingrad as a home office (my strong exaggeration).
There must be something between these extremes, right? I had placed that in the concept of “family,” and if I don’t find that mutual give-and-take, then everyone is on their own, which is also perfectly okay.
Is that MY duty as the parent generation? Where does that demand come from? I didn’t have this expectation of my parents, and they didn’t have it of their parents. I have a right to inheritance, yes, but only AFTER death and only what remains. No one has to work their butt off for me.
They live exactly where they have decided for themselves, some even far away.
The question is also what one considers “suitable” and by which expectation that “suitable” is defined. We could have built our house larger at any time with the children or even created a family housing project. But they all live elsewhere or are currently not in a position to settle down differently. We fully understand that and are therefore building our own house for the two of us, also to be as independent and secure as possible.
First of all, it is HIS property – HIS, which the younger generation wants to have prematurely; don’t confuse that.
The retiree is obviously NOT more important, why do you think that? Why should I be responsible for the “space” needed by my youth while the youth is not responsible for my kind of “space”? 😀 I encourage my children to get maximum “space” and never hold them back.
That’s exactly what I advocate. I would immediately contribute my property if one of the children wanted to find such a solution with us where both sides can be SURE to do well.
The youth takes responsibility, takes ownership, and the elder no longer interferes but is well secured. I think that’s great!
But @BackSteinGotik, we don’t read about this here… do we? That would be great for all parties involved!
The unspoken magic and frightening word remains: “CARE”! Why is there nothing written about that, but only about interest rates...
saralina87 schrieb:
But I want to say briefly – the father is a responsible adult. If he wants to secure his own care, that’s his choice.
We are also familiar with the sometimes self-neglecting tendencies of elderly people when they see their children and grandchildren. Parents are not strangers to whom you can later say: "Well, Mom and Dad... you signed it, you should have paid more attention." If we want to even use the word family here, then the values and basic principles that come with it should be taken into proper consideration. For example, my parents would have blindly signed anything from me; but that alone would not necessarily have been fair or decent, which is why they went to a notary and I signed what he had carefully prepared as necessary and appropriate. But I also could have refused to sign. The primary focus was, first and foremost, their well-being and a great rent-free apartment for them!
saralina87 schrieb:
I find it strange to always hear about the “offspring exploiting the parents.” But it doesn’t hurt to consider all perspectives.
No one says that, and I don’t think that even remotely. We have four children together; everyone goes their own way and no one would ever think of attacking us. Once both of us are gone, everything will be divided; we have a will, and all children are informed. If the topic of care comes up and I can still decide, it will be changed so that whoever provides care will gain a very clear advantage. Since I don’t know our future life or aging needs, I will not reduce our property. Isn’t that understandable from our point of view? As soon as I have anything left over, the children will come first... they already have in part, just in case my viewpoint comes across as harsh. I would rather call it "responsible," at least that is our intention.
saralina87 schrieb:
Have your parents talked to you about the potential inheritance? Or do you talk about it with your children?
Of course – they know everything they need to know, including how and where their funeral should take place. All without putting them under unexpected obligation.
saralina87 schrieb:
Have your parents talked to you about the potential inheritance? Or do you talk about it with your children?
I find it completely normal; my parents already did that when I was 20. They wanted to ensure it was distributed as sensibly and fairly as possible. Naturally, these conversations happen together with my sister.
I, on the other hand, find it odd not to settle such matters while still alive.
True, that’s not good and leaves room for trouble later. But you forget that this is about a – BEFORE – and not about the eventual inheritance. That would be very simple and 100% fair to resolve here. When both parents have passed, the house is sold and the proceeds divided equally or someone buys the house at the mutually agreed price. But that is not the issue here; here, someone wants something cheaper and that will be the problem.
saralina87 schrieb:
Settled and transferred while still alive.
Absolutely! That’s what I am talking about: “transferred” AND “settled,” with emphasis on “AND”! Settling also means taking on the responsibilities of the younger generation. That’s how it was and still is on the farm. Here, only the “giving” side is considered and the importance of “settling” is pushed aside.
In our large family, there are two farmers; everything has long been transferred and settled. The parents still live IN the house and are cared for and supported by the younger family. Great solution, then the model is perfect again.
@BackSteinGotik Thanks first for your answer.
BackSteinGotik schrieb:
There is a demographic time bomb, and thanks to our population pyramid and the unbalanced voter base (and their demands), there are fewer and fewer chances for a healthy future for everyone. This complicated situation is due to the current state of the country and is not set in stone or fallen from the sky.
There was also a "complicated situation" in my childhood in the 1960s. Looking back, those post-war years shouldn’t be romanticized nor should today be seen as too bad. I believe that “back then” many opportunities such as education, health, property ownership, housing, and change were far less accessible than they are today, and only possible for a smaller part of society.
BackSteinGotik schrieb:
In short & exaggerated for your example – everyone should work their butt off for me, and of course care for me. In return, I get a bed in the attic and the grandchildren get their own leaf rake…
😀 I’m getting that right: No, of course NOT. But I also don’t see many young people really “working their butts off” for their parents...!
Sometimes the strain might come from stressful home office work, mixed with house building forum, espresso, fresh air thanks to controlled ventilation, etc. Unfortunately, my father didn’t have Stalingrad as a home office (my strong exaggeration).
There must be something between these extremes, right? I had placed that in the concept of “family,” and if I don’t find that mutual give-and-take, then everyone is on their own, which is also perfectly okay.
BackSteinGotik schrieb:
How does the next generation, which can no longer afford real estate or the comparatively generous retirement provision of today’s seniors, cope now and later?
Is that MY duty as the parent generation? Where does that demand come from? I didn’t have this expectation of my parents, and they didn’t have it of their parents. I have a right to inheritance, yes, but only AFTER death and only what remains. No one has to work their butt off for me.
BackSteinGotik schrieb:
You kind of skipped over this – where do the child and grandchildren live? Why can’t they find suitable accommodation?
They live exactly where they have decided for themselves, some even far away.
The question is also what one considers “suitable” and by which expectation that “suitable” is defined. We could have built our house larger at any time with the children or even created a family housing project. But they all live elsewhere or are currently not in a position to settle down differently. We fully understand that and are therefore building our own house for the two of us, also to be as independent and secure as possible.
BackSteinGotik schrieb:
And why is it more important for a retiree to keep a house with a garden into old age than for a young family to have enough space?
First of all, it is HIS property – HIS, which the younger generation wants to have prematurely; don’t confuse that.
The retiree is obviously NOT more important, why do you think that? Why should I be responsible for the “space” needed by my youth while the youth is not responsible for my kind of “space”? 😀 I encourage my children to get maximum “space” and never hold them back.
BackSteinGotik schrieb:
There is also other social behavior in families, where the patriarch is not the center but steps back and passes control to the next generation.
That’s exactly what I advocate. I would immediately contribute my property if one of the children wanted to find such a solution with us where both sides can be SURE to do well.
The youth takes responsibility, takes ownership, and the elder no longer interferes but is well secured. I think that’s great!
But @BackSteinGotik, we don’t read about this here… do we? That would be great for all parties involved!
The unspoken magic and frightening word remains: “CARE”! Why is there nothing written about that, but only about interest rates...
S
Stefan00120 Mar 2021 15:10pagoni2020 schrieb:
Is it MY duty as the parent generation? Where does this expectation come from? I never had this expectation towards my parents, and they didn’t have it towards theirs. Yes, I have a right to an inheritance, but only AFTER death and only what remains. No one has to bend over backwards for me. I think the criticism was meant to convey that “your” generation, thanks to the baby boom, has the advantage of forming the majority of voters at any given time in our democratic government, and therefore may enjoy a significant portion of their own prosperity at the expense of the younger generation. Hence, a possible claim from the younger generation regarding the older generation’s money.
The injustice has been known to everyone for a long time, but it seems most of the population (who was it again?) is not interested in any change.
edit: On re-reading, I noticed the post might be somewhat one-sided and simplified. So please don’t take it too harshly.
Stefan001 schrieb:
That is why the younger generation might feel entitled to the money of the older generation.
The injustice has been known for a long time, but it seems that the majority of the population (who was that again?) has no interest in change. I do not see any entitlement or injustice in this context. Every generation has its advantages. Whether our grandparents were lucky enough to build something in the emerging economy after a war, or the parents.
It may be that @pagoni2020 is in the position of representing your “parent” generation – but the fact remains that he has also built something. Independently, his children are building something as well. As he says: when the situations and decisions of both generations (his path and the paths of the children) intersect, then together something new can be created, which is not currently the case.
It is only unjust when one party or generation tries to profit at the expense of the other. Today’s generation may struggle to find suitable and affordable building land or houses, but @pagoni2020 was in the same situation and succeeded in finding a nice plot.
Should we also compare the salaries of both generations or their job opportunities and career potential? I think everyone is the architect of their own fortune.
The fact is that the original poster is still quite young, has little or no equity saved up, and their job does not seem tied to their current location, which suggests there is still quite some potential to grow. Also regarding age: no law says you have to finance a single-family home around the age of 30 or even younger.
Therefore, I see no entitlement towards the parents here, except the entitlement to reflect on one’s own situation.
Similar topics