Living in Parent's house (but not with parents)

dragoncar · Post by **dragoncar** » Wed Aug 10, 2011 10:36 pm

This is somewhat related to the living with parents thread, but has different overtones.
I have the opportunity to live rent-free (or low rent, utilities-only, utilities+maintenance, or some other similar low-cost arrangement) in my parent's second house. This house has taken a large dip in value recently, and they don't want to sell until the market recovers, whenever that may be. They also have had very bad experiences with renters and, after taxes, feel that it's not worth the risk. So lets leave their lost opportunity cost aside and assume it costs them little to nothing to let me live there for now (i.e. the house would be empty otherwise).
The house is not huge, but it's still bigger than I would choose for ERE. In other words, it might rent for $1000/mo and if I lived elsewhere I'd pay around $500/mo. So this sounds like a pretty good deal, right?
Although I get along with my parents, and they wouldn't be living there, the house would always be theirs. They would probably have keys, etc. In other words, I'd have a degree of lost privacy and autonomy... it's not like they'd tell me what to do, just that it wouldn't be a normal landlord-tenant relationship.
So my question is: what price do you put on complete autonomy? Is it worth $500/mo to rent a room somewhere? You lose privacy with housemates as well. Is it worth $1000/mo to rent your own apartment with no housemates? Obviously, these are personal questions, but I'm curious to see what price you would pay to avoid this situation. Or, stated conversely, how much money would it have to save you to take this option?

djc · Post by **djc** » Wed Aug 10, 2011 10:58 pm

I'd give it a try and see if it works. If it doesn't work out what have you really lost. I mean your parents will still love you if you don't want to live there.
djc

Freedom_2018 · Post by **Freedom_2018** » Wed Aug 10, 2011 11:08 pm

Live in parents' house for little to no rent.
Keep housemate. Charge them market rent.
Pocket difference towards ERE/FI plans.
<Assuming this is OK with your parents. In fact I think it is worth putting in some effort and "selling" them on this plan>

dragoncar · Post by **dragoncar** » Wed Aug 10, 2011 11:30 pm

Parents don't want random tenants, otherwise they would just rent the place out to begin with.
Selling them on a particular tenant may be worth the effort, assuming I'm able to find a suitable person. That would make me the property manager.

DividendGuy · Post by **DividendGuy** » Thu Aug 11, 2011 12:00 am

I'd go for it. Sounds like a great deal with me, especially if you have a pretty nice relationship with your parents...which is how it sounds. I wouldn't even hesitate.

George the original one · Thu Aug 11, 2011 12:15 am

Ask your parents what would bother them about such a deal and let them know what concerns you have.
I would have been fine having such an arrangement with my parents or my in-laws. My sister most likely would not have been fine because she doesn't like following someone else's rules, even when it's in her interest to do so.

BeyondtheWrap · Post by **BeyondtheWrap** » Thu Aug 11, 2011 2:33 am

That's an awesome deal. Do it.

dot_com_vet · Post by **dot_com_vet** » Thu Aug 11, 2011 5:53 am

There's no shame in that, sounds like a great deal for both of you.

dragoncar · Post by **dragoncar** » Thu Aug 11, 2011 7:56 am

Thanks for the encouragement... I guess the reservation that I failed to articulate is that this arrangement feels contrary to FI -- i.e. it's not Independent. But I suppose you can be FI and continue to work for a salary, just like you can be FI and partake in cheap housing (at least while it lasts).

Chad · Post by **Chad** » Thu Aug 11, 2011 11:55 am

As others seem to have suggested I would voice my concerns with them, as it appears the relationship is healthy enough. I would bet they can easily see your viewpoint. Plus, if 5 months from now it isn't great you can always look for your own place.
With that being said I'm in a slightly similar situation. I currently rent the basement of a house (bedroom, full bath, living room) and share a kitchen with the two other tenants. More like close neighbors than roommates. However, I would still like to have my own place and live downtown. An opportunity to get a great apartment has come up (great location, great view, no roommates), but it would increase my cost by $350 a month. This would still be significantly cheaper than normal 1 bedroom apartments in this city. Thus, the dilemma...savings (logic) vs. more enjoyable lifestyle (emotional).

akratic · Post by **akratic** » Thu Aug 11, 2011 3:43 pm

I would try the deal, but not consider myself FI until I could handle my current expenses *plus* a projected rent expense. In other words, pad your expenses on your projections and plans by ~$500/mo.

jennypenny · Post by **jennypenny** » Thu Aug 11, 2011 4:44 pm

@dragoncar

I understand your hesitation. I moved out at 19 and never went back. Even when it would have made sense. Just couldn't. Needed to do it on my own (then with DH).
I think it sounds like a workable situation. Maybe give yourself a time limit if that makes you feel more comfortable.

BeyondtheWrap · Post by **BeyondtheWrap** » Thu Aug 11, 2011 7:12 pm

Don't worry about it not being independent enough. You'll only be there temporarily until they feel like selling the house, and in the meantime, you can have an increased savings rate.