My wife and I have been offered the opportunity to build a second house on her parents property. The idea behind this being that her parents are starting to look to downgrade, they want to stay where they live but the house is too large for them. It's completely renovated, the whole property is actually a beautiful place with large garages, pool, entertainment area etc.
The arrangement we have discussed is that my partner and I pay for the granny flat that would be built, in character to the original home, 2 bed 1 bath, in return we take on the main residence as our home. The cost of the build is then basically our share in the property.
The reason we are seriously looking into this is for a number of reasons. Firstly we have a bub on the way (woo!) and this is a perfect family home, and secondly, I work a 2:2 roster in the Oil & Gas industry which at the moment see's me close to home but will be pursuing an offshore career next year after the birth of bub 1 - that will most likely see me on a 28:28 roster. That being said, I can leave my wife at home comfortably knowing everything is ok and she'll handle the family fine.
The obvious negative about the situation is any money we put into the build, we are unable to pull out until the passing of her parents or selling of the property. At this current time, we have no plans to leave the area we live in and have a fantastic relationship with her parents (lived with them prior to this as well) but obviously 30+ years is a long time!
We were thinking that if we put say $200,000 into building a second dwelling, and the property valuation afterwards was $1.0m then we have written in the will/contract that we own 20% of the property. There is one other child, so when the time came that her parents passed we take 20% of the total plus half of the remaining, so 60% all up.
The other issue is financing it, I told the FIL that we would not be able to finance under our names because we do not own the property. It would have to be under theirs with a contract between us stating the total the amount we pay back.
I realise this is a bit unconventional but just after some thoughts and opinions!
The arrangement we have discussed is that my partner and I pay for the granny flat that would be built, in character to the original home, 2 bed 1 bath, in return we take on the main residence as our home. The cost of the build is then basically our share in the property.
The reason we are seriously looking into this is for a number of reasons. Firstly we have a bub on the way (woo!) and this is a perfect family home, and secondly, I work a 2:2 roster in the Oil & Gas industry which at the moment see's me close to home but will be pursuing an offshore career next year after the birth of bub 1 - that will most likely see me on a 28:28 roster. That being said, I can leave my wife at home comfortably knowing everything is ok and she'll handle the family fine.
The obvious negative about the situation is any money we put into the build, we are unable to pull out until the passing of her parents or selling of the property. At this current time, we have no plans to leave the area we live in and have a fantastic relationship with her parents (lived with them prior to this as well) but obviously 30+ years is a long time!
We were thinking that if we put say $200,000 into building a second dwelling, and the property valuation afterwards was $1.0m then we have written in the will/contract that we own 20% of the property. There is one other child, so when the time came that her parents passed we take 20% of the total plus half of the remaining, so 60% all up.
The other issue is financing it, I told the FIL that we would not be able to finance under our names because we do not own the property. It would have to be under theirs with a contract between us stating the total the amount we pay back.
I realise this is a bit unconventional but just after some thoughts and opinions!
