Is it always a bad idea to go in on a house jointly?

[Nika]

We all live in NYC, in apartments with no land.

The idea of getting away to a house in the woods with a little land sounds oh so appealing. Taking my toddler out for calm weekends in nature...

So we've been toying with the idea of a family weekend house. With split expenses, it can really be possible to buy a modest 250K cottage about an 1.5-2 hours drive from the city without too much strain.

My mom dreams of this (she and her DH probably make 130-140K and has almost no down payment so she can't buy anything in NYC. She does have a lot of disposable income but currently blows it all on luxuries (because she feels owning is out of her reach due to NYC prices). But all her life, despite any circumstances, she is very diligent at paying all her bills on time. In that aspect she has always been responsible. Her husband is in construction and can do any repair/renovation/maintenance very well. Neither of us plan to go every weekend so sharing time wise would not be a problem (I'm sure of that).

There are also no other heirs, so that will not be a problem. Also, I think she would be fine with putting a house in my name if this was a better idea overall (though than it woould be at a higher interest rate since we already own a co-op in the city and so it can't be recorder as a primary residence).

So do you think that with some particular legal arrangement this can be a nice idea? There are other expended family that would visit, and it would be fun. I love the idea of a family place in nature that has an extra bedroom and everyone is always welcome.

[ua_guy]

I don't think it's a bad idea at all, but there are caveats and you should do some research on ownership structure before buying jointly. What about purchasing the home and holding it in a family trust? The trust would govern the ownership structure and each party's interest and also the eventual sale or passing of the asset to heirs.

This sounds like a great adventure and opportunity for your family. If it were my family, we'd take our time and really look for a deal. I'd consider short sales, REO/foreclosures, etc.

Before I bought, though, I'd spend a lot of time in the area where I was looking to buy. Rent a place for a weekend or over a vacation and see if you like being out there--maybe the dream is different from reality, or maybe the dream could be satisfied with occasional vacations and renting places for the weekend, instead of buying and having to manage a 2nd home.

[disneysteve]

My mom dreams of this (she and her DH probably make 130-140K and has almost no down payment so she can't buy anything in NYC. She does have a lot of disposable income but currently blows it all on luxuries (because she feels owning is out of her reach due to NYC prices).

I think she would be fine with putting a house in my name if this was a better idea overall

I love the idea of a family place in nature that has an extra bedroom and everyone is always welcome.

I don't know if it is always a bad idea but it certainly sounds like trouble in this case.

The fact that your mom blows all of her disposable income on luxury crap and has little saved despite a decent income (I know 130K isn't all that great in NYC) is a big red flag to me.

And why would you want the house in your name? Remember, if it is in your name, it ultimately is your responsibility. If mom stops paying, it is all on you. If you can comfortably afford it on your own, why involve mom at all? Buy it yourself and invite her to use it. If you can't afford it on your own, don't do it.

[Nika]

Disneysteve, my mom is very good at paying her bills and her obligations. She is not good at saving. Maybe has something to do with currency default she experienced in her country of origin. I don't know.

I know the area that I'm considering for a weekend house very well. My friends have a second house there and we have spend quite a bit of time in the area. They are good friends, and have given us the keys so that we can use the place whenever we want. But, it is not ours, and naturally we can't be inviting other people there. And I can see how nice it is to have a house with land that is your own. (Not an option for us in NYC, well, at least not in the areas where we want to live.) For my mom, a house can be a sort of forced retirement savings.

I would love to be able to invest in real estate. If we lived any place else, we could. In NYC metro, it is a different ball game. So looking for ways.

[disneysteve]

Disneysteve, my mom is very good at paying her bills and her obligations. She is not good at saving.

For my mom, a house can be a sort of forced retirement savings.

It wouldn't be retirement savings for her if the house is in your name.

If you want to pursue this idea, I would urge you to speak to an attorney. I don't know enough to discuss this intelligently but there should be some way to set it up in trust or incorporated or something so that neither of you actually owns it personally but both have rights to use it and are responsible for the associated costs.

But again, if you can't afford to do it yourself, I'd be very, very cautious. You don't want to find yourself stuck with the house if for any reason, your mother fails to hold up her end of the bargain.

[Nika]

Sigh. Probably not the best thing to do.

I'm just feeling so restless. Like an itch I can't scratch.

[disneysteve]

Sigh. Probably not the best thing to do.

I'm just feeling so restless. Like an itch I can't scratch.

I know the feeling. We rent a house in Florida every year and for the longest time, I wanted to just buy one, use it when we went and rent it out the rest of the time. I did all of my homework, spoke to realtors, spoke to property management companies, spoke to several people who own rental homes in the area, etc. No matter how I ran the numbers, it just didn't make sense for us to own rather than continuing to rent. So I get that "itch" to own a vacation home. Most of the time, it just doesn't make sense financially.

[scfr]

Is there a way to make it happen without going in with your mother? For example, purchase and operate as a vacation rental property? (Careful - The IRS has rules about how much a vacation rental property can be used for personal use.) If not, then I suggest waiting and being satisfied with weekend getaways to a peaceful setting a couple times a year, renting from someone else. Or look in to swapping with someone who lives in an outlying area and would like to come in to the big city for an occasional weekend. For the long term, ask yourself if you really want to continue city life.

[Gailete]

it can really be possible to buy a modest 250K cottage about an 1.5-2 hours drive from the city without too much strain.

I blink when I see statements like that. It is like NYC is in a different world than the one I live in. That much money HERE gets you a mini-McMansion! Most Lake Erie front property I don't think goes for that much in the truly modest cottages. I have seen some huge estates up for sale by the lake for around $500K but they are HUGE and the utilities probably run $10K or more a year at least so certainly not vacation cottage property.

That being said, if you can't afford this on your own, I can't see trying it with other people as there will end up being lots of hard feeling especially when one thinks you have to paint the place one year, and for some reason this year you don't have the money to pitch in, etc. You would have to assume or hope that the other folks and you will always have the money for the needed maintenance, taxes, insurance. And what will be the tie breaker when everyone want the same weekend? It could happen.

There is nothing wrong with wanting to own the land under your feet, but you might need to move to find it cheap enough.

[~bs]

not if you're married and don't get divorced.

it does have drawback regardless though, as any decision your making needs to be run by your partner and can be affected by their financial situation. On the plus side, you're spreading your fianncail risk because you only are on the hook for 1/2 the property as opposed to the entire thing.