We showed a rent house that we are working on to an older woman the other day. She was referred to us by the realtor that we always use. They have known each other for years. She owns a small house in a nice neighborhood and likes it, but she wants to sell & rent because the upkeep, yard, etc. is too much for her now. We kicked it around after she left and wondered if she'd be interested in us buying her house & her staying where she is. We asked the realtor & she's meeting with her tomorrow to talk about pricing her house and what she really wants to do. I think she might have some "sticker shock" when she starts looking for a nice, comparable rental and so we thought this might be a good option for her & potentially us. The realtor told us her house is well maintained & "super cute" but we haven't seen it.
Let's say the price is good, there are no major repairs to be made and the upkeep is reasonable (big yard & small pool) and we can make a deal. Would we be foolish to come up with a lower than normal rent for her to stay in it? Of course it would have to cover the mortgage (if we take out a loan), taxes & insurance, yard - plus some for maintenance & the hassle factor/profit - but I think those costs would be less than what our rent will be on the house she looked at. We are not a charity and hopefully the price will be right and we could make money on it eventually. We wouldn't guarantee she could live there forever, we'd do a standard 1 year lease & go from there.
We see the upside being that we wouldn't have to do any renovations while she's there or look for a tenant - although it will be an easy rent later based on it's size & location. (However the pool concerns me on a rental so it might be our first flip house.) Having her cover all costs related to the property and stay is a good thing, right? I know we're supposed to be in this for the money and I think it will produce a good profit later but in the meantime, she'd basically be paying if off for us. I'd guess her age to be late 60's or early 70's. Still gets around pretty good, but with a cane.
Once we find out the price we'll have to figure our eventual upgrades/reno costs into the deal, what we can charge for rent if she moves out, etc. to see if it's workable.
On the other hand, she might just want a change and wouldn't be interested. We'll know tomorrow.
Thoughts? Are we missing something obvious?
edit: Husband Schwack just drove by it & says it's pretty great on the outside - depending on price, looks like we're interested if she stays or not, but I think it would be great if she did.
Let's say the price is good, there are no major repairs to be made and the upkeep is reasonable (big yard & small pool) and we can make a deal. Would we be foolish to come up with a lower than normal rent for her to stay in it? Of course it would have to cover the mortgage (if we take out a loan), taxes & insurance, yard - plus some for maintenance & the hassle factor/profit - but I think those costs would be less than what our rent will be on the house she looked at. We are not a charity and hopefully the price will be right and we could make money on it eventually. We wouldn't guarantee she could live there forever, we'd do a standard 1 year lease & go from there.
We see the upside being that we wouldn't have to do any renovations while she's there or look for a tenant - although it will be an easy rent later based on it's size & location. (However the pool concerns me on a rental so it might be our first flip house.) Having her cover all costs related to the property and stay is a good thing, right? I know we're supposed to be in this for the money and I think it will produce a good profit later but in the meantime, she'd basically be paying if off for us. I'd guess her age to be late 60's or early 70's. Still gets around pretty good, but with a cane.
Once we find out the price we'll have to figure our eventual upgrades/reno costs into the deal, what we can charge for rent if she moves out, etc. to see if it's workable.
On the other hand, she might just want a change and wouldn't be interested. We'll know tomorrow.
Thoughts? Are we missing something obvious?
edit: Husband Schwack just drove by it & says it's pretty great on the outside - depending on price, looks like we're interested if she stays or not, but I think it would be great if she did.