Reluctant landlord

Littleredcar

I am currently considering becoming a reluctant landlord. Without pulling on the heartstrings too much s family member has just been given a terminal illness diagnosis. They live alone and I am the only relative . I am thinking of building s downstairs bedroom on to my home to accommodate them. I have no savings but think I could borrow to do this and use rental income from their home to pay . I have no idea of rental market and have never rented . I was looking up hap but am totally lost . Can someone give me the pros and cons of this . The home is in Dublin 5 and fairly close to beaumont hospital so I think I could rent it easily but in the circumstances will need as little hassle as possible

beauf

You need to have all the legal and tax stuff sorted before you can start using someone else's money and assets help them.

If they get so sick and can't sort out bills or sign for anything or call into a bank to sort things you won't be able to do it for them unless you have it sorted legally.

Renting is a business. What happens if you make a loss at it. Or you have a tenant that won't pay. Can you cover the loans in that scenario.

If the relative needs the fair deal for respite care, that takes 80% of income. That rent is their income not yours. Unless the property is transferred to you, or you rent it from the relative.

If they have a medical card a change in income might cause them to lose it.

The tax and legal system want their cut regardless.

beauf

At the same time you want to do what's best for your relative. But you have to be practical.

Probably wise to do some financial planning with an account etc.

The_Conductor

Another thing- if the relative is liable to ever need formal nursing home care- letting the property will count as means for them- and mess up their entitlements.
I hate to suggest it- but leaving the property vacant may work out for the best for both the relative and you in the longer run- or possibly do a few short term lets over the summer months- just go get sufficient funds to manage the upkeep of the property (cognisant of the tax and other implications). Student letting- given the location- could work for term time lettings. Its an interesting one- but its fraught with possible unintended consequences- which is why there are so many elderly people out there in nursing homes who don't let their sole properties- the financial implications don't stack up.

antoinolachtnai

I would try to avoid the borrowing. Neither of you are geared up for borrowing by the sounds of it. It is time consuming and expensive at the moment to get planning and builders for the type of work you are considering.

Time is not on your relative’s side.

See if you can come up with a less complicated option for the house, like installing a stairlift. Would cost between 1500 euros and 5 grand. If your relative has a medical card, the HSE may be prepared to contribute to the cost.

Get the other house rented. There is usually a ready market for property near acute hospitals. It will take some management but the money should be enough to be worth your while. There will be tax but it will mean your relative will have income. The reason for doing this is to keep the house occupied and to make sure there is a fund to carry out necessary maintenance as needed.

You will hear about the downsides of being a landlord and there are many. You just have to get the advice you need and get the house rented. If you don’t your relative will be severely constrained financially.

The alternative as I see it is for your relative to sell up now. I do not see much benefit in holding the house if there is no rent from it. Your relative needs cash, not assets.

The relative can pay you 1100 per month to live in your house without tax implications.

beauf

You'd need to know how long roughly you'd expect someone to live. We had something similar with a relative recently and we barely got the stair lift in (never got to doing more) before they had to be hospitalised. In fact their condition was one step faster than us at all time. All support services and aids took forever to get done.