Hi guys I'm a pretty frequent lurker and thought I might be able to get some insight on an issue I'm facing. Background I'm 31, in medicine, current assets $150k brokerage, $80k 401k, $20k emergency fund. Saving about $100k/year right now that goes about 2/1 into brokerage and 401k. No debt. Don't own any property myself and plan to keep renting for the foreseeable future. I make about $210k/year but it's in DC, so cost of living is high though not maybe SF-high. As you can tell from my savings amount, I'm doing OK in terms of getting my expenses low enough that I have some cash to play with (and by play with I mean save).
Anyway, my parents weren't around much growing up and my uncle and aunt basically took me in and raised me as their own daughter. I owe a lot to them. They never made much money but have been good enough about their 401ks and home equity that combined with social security they might be able to actually have a modest retirement starting at maybe 67 (couple years) in a pretty inexpensive part of Pennsylvania (random outer suburbs). I'd really like them to be able to have that, they've worked hard nearly 50 years each, have never complained, and are just incredible people.
Getting to my question--I'm considering buying them a house. Doing something like that would make their potential retirement that much more doable. I haven't talked to them about it but I've talked to a few other family members and I think the way it would work is, I would put a down payment on a nice little spot that costs about $250,000. I'd put down 20%, so $50,000. Then I'd take out a 30-year mortgage and I'd pay that myself each month, about $950/month. My aunt and uncle would be responsible for taxes, insurance, regular maintenance (which over time yes there would be some, but it's a pretty modest place, so hopefully nothing too crazy), and other non-mortgage costs. So, I'm out the 950, but they cover the costs.
The idea is, they'd have a place to live, and then when they eventually pass on, I'd sell the place and put the money in a retirement or brokerage account at that point. My question is basically, what are your thoughts on this plan? Is this a terrible idea financially? To clarify, from an investment standpoint, I know this isn't an "ideal" investment, especially since I won't be making rental income off my real estate investment, but given my goal of wanting to help them out, is this at least an "OK" investment? This sub seems to be good at identifying pitfalls, is why I ask. My goal is basically to help them out and I'm willing to take a bit of a hit on the investment, but don't want to stray too far into "that's just a stupid idea" territory. Thanks!
Submitted August 26, 2017 at 12:56PM by throuhway99 http://ift.tt/2vqPQNf
