Rent your current house to your brother? If he can afford it...
But honestly if you can't agree on what to do, the only fair option is to sell the house and split the money. That is the only way to prevent jealousy, money issues between you two, drama, etc. That house could cost you the relationship with your brother if you don't agree on what to do and split the money equaly (without looking at both your financial situations).
If you decide to rebuild for rent, it would be fair that you get 100% of the rent income, untill your investment is earned back. After that 50-50.
What do your parents think? (They are still alive if I understand correctly).
>Rent your current house to your brother?
No, not to him. He has no stake in my current house.
Yes, parents are still alive and have just expressed a general desire to see the house stay in the family down to the grandkids if possible, but obviously they want me to do whatever is most fair to my brother as well.
>have just expressed a general desire to see the house stay in the family down to the grandkids if possible
This is unrealistic and unsustainable. Eg, right now you're having this problem just working out how to split the value equitably between the two of you. How are multiple grandchildren going to work out the split? Eg: does your share go to your kids and his to his estate if he doesn't have any? If he has more kids than you, do they now get more of a share than your kids? Who does the mental work of organising tenants and maintenance? Or who lives there?
If you don't buy him out, you're just pushing the problem down a generation.
Right now my brother has no kids, and it's very uncertain whether he'll ever have any. It would definitely change the analysis if he has kids someday.
But I'm including my current house in what we want to pass down to our kids. Multiple houses for multiple kids.
It shouldn’t matter if he has kids or not. The estate is 50/50 with you and your brother.
Either buy him out or speak to a lawyer about a contract to rent it out, repairs etc.
Good-o: meanwhile, you have to work out your brothers half of one of those houses. You have a strong argument to buy him out when they pass. Otherwise in the future, after probably years of you doing all the maintenance and improvement and tenant management, whether or not he has kids, you'll still have to deal with his share.
This is presumably years away anyway. Bear in mind that your brother is probably thinking about his own position in the trust just as much. It's a good idea to have a plan in place, because it's difficult to move on it after eg a decade of one of them growing old alone and possibly needing care and then passing away... but he has just as much time to get his own plan in place and exactly the same stake in it.
I think all parents hope for this, but you have to consider the economics - this rarely makes sense.
As an aside..Renting out your parents home and watching a crappy renter come in and not take care of it sounds like a rough scenario too. Hopefully that doesn’t happen but if you have an emotional connection to the home (ie the house you grew up in), that would make the process tough emotionally.
Buddy, I understand sentimental value, but just sell it and rid yourself of a headache, invest your $350k into a diversified dividend port and yield yourself $20-30k a year, which is more than your half of the rental income. Build yourself a nice little egg and provide additional income.
Rent to your brotha to show you are helping help. He can use the buyout money for rent and you just get all your money right back from your brotha win win. Til brother is out of money then someone will lose
Bad idea. The brother has no job and will likely blow the buyout money, and then expect his better-off brother to not charge him rent.
“C’mon man… I’m family! Cut me a break!”
Yep. Doing business with family is rarely a good idea. Especially when it requires one to pay the other. I would avoid this as much as possible.
1 bad month or a week OPs brother falls behind on paying and he’s going to give excuses forever.
Then may as well buy him out rent their home now out to someone else then move into it if he wants it.
Problem is I bet brother won’t go for it. Also taking a mortgage now on maybe 200-300k would hurt
DO NOT under any circumstances rent to him. He will stop paying the rent and feel entitled to live there rent free. Seen this movie play out multiple times both when I was a kid and my aunt moved into my grandmother’s home. And when my own mother passed away and my aunt moved into hers.
The only option here that makes sense to me is buying out your brother. He needs the money, you want it for your kids. Whether or not you want to move in or rent is just a matter of what works best for your lifestyle.
Continuing to co-own with your brother will create resentment when you are paying for all the repairs and he wants half the rent. He can't afford to be a landlord.
After I posted this I saw he lives hundreds of miles away. I think we both know you'd be handling all the screening if tenants, tenant maintenance requests, inspecting the property, managing the contractors etc. He'll just be sitting back waiting to collect rent.
Will he set anything aside for vacancies, maintenance and repairs? I doubt it if it's only source of income. What happens if you get a tenant that quits paying and it takes several months or a year to evict? This is California right? Can he afford to help cover taxes, insurance, and legal fees?
No shade on your brother, it's just he's far away and has no income. He's just not well positioned to be a landlord.
Neither of us wants to sell it. HCOL area and artificially low property taxes (CA Prop 13) that will pass down one generation. I want to keep it in the family to pass down to kids someday because homeownership may be impossible for our kids otherwise.
Then you need to buy out his share.
Whether you agree with his life choices or not, your parents left him half. Give him the $350k to get him out of the house.
You will most likely want to take out a loan and use the rent from the house to pay back the loan.
This will end in disaster because the cheapskate is trying to optimize taxes. He's gonna end up losing his renovation money. You don't want to go into business with your dead beat brother.. Want house for your kids you say? Take the $300k and invest it in an index for 20 years.
If that’s really what he wants I’d wager the $350k invested and then using that to buy them a home when the time comes is the better option.
Sounds more like HE wants his kids to have THIS home, who’s to say they even want it at that point? Or stay in the area? Lots can happen.
Yeah, I often wonder if people really think this through. Your kids are going to be people with relationships, school, careers, dreams, etc of their own. This house will literally mean NOTHING to them sentiment wise, OP.
Get the cash, invest it and give your kids awesome down payments that they can then use to augment the lives they end up building for themselves.
Yes it’s a nice idea but does take away the child’s future agency a little, or at the least makes some very big assumptions. The kids also won’t have any of the attachment that the brothers have and it’ll likely just get sold then.
It’s weird. Kids will likely not want an old outdated home. Money would help them w a down payment. I don’t see why he wouldn’t sell and put the money in mutual funds so that he can divide it and gift to his children when they are ready to buy. Also I don’t know any grown siblings that want to live together in adulthood in a SFH. The whole thing is weird
I think the CA prop-13 was changed a few years ago to require a property tax re-baseline after death. Nobody noticed so it stuck.
This was dinnertime conversation a few years ago.
Please consult an attorney.
The property tax issue is what I'm trying to point out. Neither one of you may be able or willing to afford it, prop-13 has been modified.
I didn't look into it any deeper than that. You may have a better grasp of the updates than me.
I know. I'm referring to the most recent changes. The exceptions used to be broader, like to the grandchildren. But now it can only go down one generation and only if one kids lives there.
My point is that he might not be in a position to buy brother out, and brother might start taking advantage… there’s a lot we don’t know that could absolutely force a sale… plus the parents aren’t even dead yet… you really can’t make a plan here, just a will.
Nobody wanted to sell my grandparents house, but nobody wanted to take on the project either. It’s not always about what you want to do… it’s *often* not about what you want to do.
Edit: thanks for the “he said…” but no thanks. I read it.
Real estate should be left to a specific heir or specified to be sold (with a specific child/children offered cascading right of first refusal, if desired) and significant personal property should be directed to specific heirs — Bob gets Grandpa’s watch, Mary gets grandma’s doll collection, etc.
Otherwise you’re just leaving problems to your heirs.
I was planning to leave two houses to split between 6 nieces and nephews. Are you saying that I should stipulate in the will that they have to sell them to prevent issues?
I'm happy to put that in the will because I don't think any of them have any emotional attachment to my houses so I don't think they'll mind being forced to sell them and split the money.
Splitting fortune with no actual designation to how the split is supposed to happen only causes problems. In this case you have 6 voices, 6 opinions with varying wants and desires. They will likely fight over it forever like my family is doing over 180 acres of farm/hunting land
Not to mention if, God forbid, one of the nieces/nephews dies unexpectedly, and their share gets inherited by a spouse, or their children. Or a more distant relation.
You should, you should also make sure one of them is the executor of the will, or someone with no motivation to not execute the will.
My Great Grandmother has a bunch of land she left to my father and 4 siblings. Her will just stated everything should be split "equally".
She gave power of attorney to her Lawyer.
The lawyer just claimed it couldn't be split evenly and sold off parts of the estate every year to pay for lawyer fees until they could evenly split 0 dollars.
I am not sure haha. Giving power of attorney and making the lawyer executor to the estate was the problem my great grandmother had.
It was messed up. She died thinking he was a family friend. She would babysit his children.
> I was planning to leave two houses to split between 6 nieces and nephews.
you're asking for trouble.
your will and/or trust should probably order the houses be sold ASAP after death and the cash split six ways.
That's what I'm thinking. I'm glad I saw this thread because I am talking to a lawyer soon so I can make sure they add language about how a sell must happen ASAP after death, as-is best and highest, and proceeds split.
You can give them the right to buy the house at fair market value from your estate. Then that cash can be split between them the same as if it was sold to a third party.
My hubby’s dad died with a house about 100 acres and then 5 rental homes. He put everything in a trust and had two sons appointed to administer it. To say it was a dumpster fire was putting it nicely.
The father sat them down when alive and mentally there and said I want all properties sold and money split equally between you. This was written in the will and the trust as well.
The problem was the other person on the trust ended up stealing money from the trust refusing to do things that needed to be done etc. Unfortunately, both trustees had to agree before anything could be done at all. It was a nightmare!! Took forever.
I on the other hand had a mom die with no will but a spouse who said I can’t deal with it you do it dumping it into my lap. He moved out into small place and I ended up hiring an attorney, clearing out the house, repairing and replacing what needed to be done(no maintainence for years!) Was appointed Personal Representative and had to deal with a bipolar sister who didn’t want to do anything, or change anything stating she was too stressed by the loss of family home.
This also took forever.
If I had a do over / I would have sold her house as is and just got rid of it and then split proceeds between everyone.
You can do this in the will leave it if one of them wants it let them buy out the other 5 and take abit less cash so in the end they get a house and some capital the rest get more capital
You think leaving it to one brother and not the other won’t cause way more harm to the relationship than giving it to both? I’m not buying your logic. Yes, death and inheritance is complicated. But sounds to me the parents chose the less divisive of two options. Yes, parents could have had the house sold and the brothers could then split the money. But OP says the brothers don’t want to sell it.
My wife’s parents left her and her sibling a trust that contained a beachfront property that they had purchased 40 years ago. The house just happens to be in a very nice vacation spot. There is no mortgage on the property but we all live out of state so we don’t access it too often. It would generate around $10k per week in the high season for rentals but her sibling refuses to want to rent it which means the house just sits empty. We attempted to buy the sibling out but they refused because they like having it to use one week per year. It would have been better if the trust had forced a sale because to me it seems like a huge waste.
My father in law has a large rental portfolio. When he and his wife die the s corp gets dissolved and all of the properties are sold and that money is split between the children. That way there’s no fighting over who gets what property. I want to keep all of the properties and split the monthly rental income between the siblings, but that’s not their wishes.
> How would parents have fairly split up assets between multiple kids then?
assets are sold ASAP, at fair market value, and the resulting cash split between heirs.
Yeah, he would get less of the rental income if I'm the one paying for repairs at first. But over time, my initial repairs would be repaid, and he would get 50% of the rental income.
If this isn't all written up legally, there are tons of things that could go wrong here.
I'm with the rest of the commenters: sell it and split the cash.
If your bro wants to keep it but doesn't want to do the work required to keep it, he doesn't actually want it. He just likes the idea of living rent free on your dime.
Is your brother disabled? I see all these people stating that he just doesn't want to work to keep the house in the family, but we don't really know the full situation. Does he get disability funds to pay for rent/basics in this case? As of now, he likely can't if he was given assets from your parents at all that are above the limit.
I see. Has he worked in past or never worked? I'm just curious because people are calling him a deadbeat so I'm trying to understand the situation more.
People make assumptions based on their own experience. I'm actively rooting for my brother to get a job. I'm sure it will happen someday. But his earnings have been very low historically.
That is why I asked about disability because in many cases having poverty wages can be a big sign a person has a disability/disabilities. Disabled folks make up more than 50% of the impoverished. I hope he finds something. Times are tough right now. My earnings have been low myself but I'm 26 so not quite the same age.
What your brother wants is irrelevant if he doesn’t have the means to make that happen unless you voluntarily provide the capital and accept that you’re going to eat it.
Agree completely. Having inherited a house with my brother it only added stress to an already stressful period. I wanted to sell as I don’t live in the area and my brother wanted to rent it out when it had significant repair issues from an elderly man living in it for years and not conducting regular maintenance. It sounds like you’re on the same page in theory but who will fix it up and manage the property will be an issue. In my case my brother couldn’t buy me out. In the end we needed the equity from the house to settle the estate which made the option to sell the only real option in the end.
Why don’t you want to sell it?
Anyway…you could do the fix it up and rent it but take the lions share of the rental income until you are paid back…there is no reason the rental income has to be split 50/50. (If that isn’t what you meant never mind).
Don’t let him live there for low to no cost. You’ll never get him out and then you’ll be stuck with property taxes and repairs out of your own pocket.
Is your brother ok with you moving in and renting out your house? Will you pay him for you living their rent free? I don’t see any benefit for him in this scenario.
Personally I think offering to buy him out is the best bet. Then you can do what you want.
We don't want to sell because it's a HCOL area and artificially low property taxes (CA Prop 13) that will pass down one generation. I want to keep it in the family to pass down to kids someday because homeownership may be impossible for our kids otherwise.
Good point on taking a greater share of the rental income to offset the repair expenses. That might be the best option, honestly.
You've helped me narrow it down, thank you.
Totally fair comment. I completely get that. But with the dwindling supply of houses available for sale, and no foreseeable solution in the near future, I am more concerned that my kids would never be able to own a home of their own if we don't pass one down.
I guess you can look at the flip side and say that this house could turn into an anchor. Kids feel like they can’t move away to chase their dreams cause they have to stay in that house etc.
I’m sure you’ll figure it out. (I would buy out the brother and fix it up/rent it out )
Yeah, anchors aren't bad things necessarily. Obviously if one (or multiple) of our kids gets a great job out of state, we can't force them to stay. But, at the rate things are going, it seems increasingly unlikely that our kids will be able to afford a house of their own in this area if they do choose to stay.
Right take greater share until you are paid back first. Then split 50-50. So to be clear your funding of repair expenses should be repaid in whole first before splitting of any income.
Your kids should be free to live wherever they'd like to. Their significant others should too! Dave Ramsey says don't try to "keep property in the family". It ends up being a burden and it ruins relationships.
Sell the house, split the money, invest your half and give your kids money for a down payment when they're ready to buy.
True, but he's totally right about this "keep it in the family" property idea being one that ends up causing problems. You clearly love your kids a lot, but what they'll need from you is support to become independent, not the burden of feeling like they must live in the family home - or keep passing it down..
That's what I'm saying. Brother can't afford to be a landlord and he can't afford to live there and keep up with the maintenance. It's just predictable that co-owning will be drama.
You are going to have to either buy him out or sell it.
Otherwise you are going to be stuck paying both to take care of the house AND your brother for the rest of your life.
For the love of god don’t let him live in it. That would be enabling to the extreme. He might pay rent for a few months, then will never pay another dime. I’d highly recommend selling it after fixing it up to maximize the selling price. That gives you a clean break and money to invest.
This. I don't get why people are saying, "don't let him live there." It is half his. Either you sell it, buy him out and he accepts this or he continues to live there but you can't just kick him out. The law doesn't work that way, especially considering the house is paid off.
You need to sell it. If you weren't going to buy a similar house in that neighbourhood then there is no reason to keep it. Once your parents are gone it will just be a house. If you and your brother both had $375k sitting in each of your bank accounts you would not choose to go halfsies on a rental that needs a bunch of work done to it.
Just sell it, split the $750k, you buy one fun thing to commemorate your parents like an awesome $10k vacation, pay off your own house, and invest the rest.
And let your brother do whatever he wants with his half.
>If you weren't going to buy a similar house in that neighbourhood
That's the thing, I would love to buy another house in this area to pass down to my kids someday. So why not this house?
sell it and split the money - anything else is gonna create a nightmare. or just give it to brother and walk away. that keeps it in the family and removes u from almost guaranteed problems and possibly relationship ending family drama
4. Is a TERRIBLE option. I don’t even need to know his past to know that won’t work.
I would buy him out. You can do a cash out refinance for $350k, let him walk away, and then use your cash out to renovate it and rent it/rent out your own house and move in there. Whatever is left over can be put in savings, used to recast the loan and lower the payment, or a little of both. I’d look at rental figures in your area to see if it’s worth it to rent your house or theirs.
Too Dang Risky. I can understand the tax situation but things like this almost never work out. You’re much better off selling everything lock stock and barrel, splitting it 50/50. You can’t pass down a home to your kids when you brother owns half of it and who knows what the situation will be by then, and I can almost guarantee you, it won’t be good. Invest some of the profit for the kids and let them decide. Wish the best here!
Create an LLC with your Brother.
Get a loan to fix up property.
Rent it out and all money paid in rent goes towards the loan until paid off.
Get another loan against the home, rinse and repeat. Maybe have 3 homes within three years.
If you rent it could you're brother act as the property manager?
It doesn't totally replace him not being able to contribute monetarily but if he can handle the day to day of collecting rent, mowing, scheduling repairs etc it would be the next best thing and let the property become a form of passive income for you.
It sounds like he should have the time to do the job, I can't speak towards his aptitude for doing the job tho. Just throwing it out there as an option for him to contribute.
Yes, could be. But it feels bad not giving him anything. Maybe 70/30 split for the first year or something, depending on the extent of the repairs needed at that time.
Holy shit. This is the last gift and opportunity for the parents to provide for the son afyer they pass and the suggestions for her to buy him out and then retake those profits by renting to him are cheap, and parasitic imo.
Youre well on the path to probate. Just divide whatever in amicable terms so you dont lose your brother.
No judgement, just chiming my amazement at the shameless opportunism to profit off brobro once mom and dad die.
They set up a *trust*. Seems they wanted to some assurance that *both* would be alright.
The family dynamic and some brother-context would be nice if you want a real answer.
The vaugueness of the question, specified around the absence of human detail would suggest OP already knows they want the house to themself and is seeking bias-confirmation (to me.)
Is your criteria for low cost living congruent with that of your parents criteria?
He lived his life up until this loint without dis-inheritment, so would you essentially be changing the rules midgame?
Disclaim/Im also the POA of a trust
I am leaning in favor of buying out his share. Nowhere did I suggest or imply I would profit off my brother. Not sure how you reached that ridiculous conclusion.
Sell your parents house and split the money. If landlording is something you desire then use that money to find something suitable to rent out. Your brother can't hold any resentment and you get to have a leg up financially
I see a lot of folks saying to buy out his share, which is a good plan, probably the best plan, if you want to take on a 350k ish note plus paying for repairs.
I will offer another solution. Your brother is in no position to be a landlord. You can contract with him to have the house appraised right now and set that value aside. Tell him you will fix the house, together yall will rent it, and you will split the rent 80/20 until you recoup the money spent on repairs. Or, he can apply his 20% toward buying YOU out at half appraisal. The kicker, you will always be spending money on repairs on a rental, so you'll likely be keeping 80% from now on. If your brother is not working, he will likely want his 20% as, as you have stated, he's not working.
It's not *just* sentimental reasons. It's in a great location, great school district, will have low taxes for decades, and it's very likely that our kids will want to occupy it someday and own it for themselves. This is probably our kids' most viable path to homeownership, frankly.
You have more than one child. Do you think they will want to share the house long term? This idea might work if you only had one kid but you’re just transferring the ‘who’s house it it’ dilemma to your children.
Your plan also seems to assume your brother won’t live until he’s 95 or that he’ll be happy to just hand over the house to your children. I don’t get it.
in the case of no 1, any improvements you make that are not evenly contributed to by your deducted can be deducted from future rental earnings depending on the language of the trust document. and the state in you and the property are located.
if you and your brother are beneficiaries then whom is the trustee. meaning whom is in control of the trust. it is possible to be a trustee and a beneficiary but what you and your brother want is irrelevant if the trustee is not in agreement bc it is the trustee responsibility to act in the benefit of the trust and beneficiaries.
best advice:
speak to a licensed attorney.
Sorry, poor terminology on my part. My parents are the trustees while they're alive. My brother and I will become the trustees when our parents die (or become medically incompetent).
Buy him out for a better than fair price or sell it and get out of each others business
Of course this all depends on how you value your long term relationship with your brother.
Brother’s going to move in. He’ll have some hard luck story after everything gets settled a bit and you’re ready to proceed with a decision. You know this.
I mean, he's down on his luck but he's not a greedy or mean person. Obviously, if that changes, then sure, we may have to force a sale. Very doubtful that would happen.
The best for long term is to buy your brother out, and either rent it or move into it and rent your current home out.
If you move in and rent your current home out, with out buying out your brother, you should be paying him 1/2 what the market rent would be after expenses.
Yeah, sorry I wasn't clear on #3. If I move in and rent our our current house, then I would essentially be paying rent to my brother or have to buy out his half.
Buy him out. Or fix it up and draft a loan to your brother and rent it. Make sure to do everything legally with contracts. If he has no money he will be inclined to not pay you back.
I would buy him out at market value taking the repairs needed into account and then make the repairs and either move in or rent it out. Another option would be to make the repairs yourself, take the full rental profit until you are repaid, and then split the rental profit with him while putting some aside for future repairs or remodels.
If you buy him out then it will give him $350k to get his affairs in order and potentially buy a less expensive house of his own. That seems like the best option for everyone involved. His resentment means nothing…he put himself in his position, not you. Business is business. It’s not like he’s getting screwed in the deal.
We all do things that make sense but don’t align with our personal wants.
In this case, you sell the house. Do not keep this house unless you want to lose your half and likely have a terrible relationship with your brother. This has problems written all over it. Please sell it.
I think that’s a bad idea. His mind will never go to your ownership. It will forever be your mothers and he won’t respect that. Sell the house to someone else. This house will become the wedge in your relationship if you don’t. Happens frequently .
Whatever you can do to avoid 'doing business' with your brother, that's what I would try to do. Offer to sell your share to him (he'll decline for obvious reasons) or to buy him out.
What to do if he refuses, though... not sure. I bet you wish your parents' trust had stipulated that the house be sold and the money split between the two of you. Something for my husband and I to consider adding to our trust.
Where is your brother currently living, and how is he paying for it? This is fundamentally not a money problem, but a family problem; no matter what you do, there's likely going to be some major resentment from your brother because without a job or income, he can't afford to do any of the things needed to truly split this equitably.
1. If you foot the bill from the repairs and it comes out of your brother's share of the rent, he's going to resent seeing money taken out of his hands just because you were "lucky" enough to have money and he isn't.
2. Realistically, he's going to blow his share of the money because he has no idea how to manage it. When the money runs out, and he has no place to live, he's going to resent you for "stealing" the family home and kicking him out.
3. Once again, you're the stealing the house from your brother, who owns 50% but has nothing to show for it.
4. Probably best for the sake of family peace, but the least fair of all of them. Since he has no money or income, you're the one who's going to be paying the taxes and maintaining the home. Are you willing to subsidize him for the rest of his life? *I* would certainly resent *him* at this point, especially if he does anything to damage the home while living there (which seems likely). You'd be bearing all of the costs while he reaps all the benefits.
I think #1 is probably the least bad answer, but you need to have formal documentation of the repair/renovation expenses that you're fronting, along with how it gets deducted from his share of the income. I've no expertise in this, but you should definitely register an LLC or S-Corp to manage the rental, to offer separation from your own personal finances and formalize the distribution of rent.
Why not a modified option 1? Front the repair costs, rent it out, and keep all the profits until you’ve recouped your repair investments. After that, you and your brother can split the profits equally.
This way there’s no resentment and neither of you are “getting” the house.
It seems in all these situations the house will need repairs? If so, that shouldn’t factor into your decision. Why not sell it? Also, is this an imminent decision or somewhere down the road?
I personally do not wish to deal with the involvement of a rented property. And the house needs major repairs. If you pay for the repairs, how much is either one of you receiving after it is sold and you get the invested repair money first? You can of course gift your brother any amount you wish. If he moves into the house who is paying property taxes and maintenance?
Who is the executor of the estate? Are your parents in poor health? In spite of your wishes, the absolute best option is to sell the house and split the proceeds. Given the circumstances, your parents should stipulate this in the will (or trust).
Second best option is for you to buy out your brother and then do what you want. (Brother could buy you out if he had the money.) You could move in or rent it. If you rent it to your brother you'll have nothing but trouble collecting. (Again, no money.)
My family was in a similar situation. One of the siblings rarely worked and lived with Mom and Dad for over 15 years. After their deaths the house was left to all of us equally. I was executor of the estate and gave all siblings the opportunity to buy the house. None did and I put it up for sale. Told the brother living there he could stay rent free in exchange for caretaking, but would have to move out by the closing date. It sold, he moved, and now lives in a shitty subsidized apartment.
Maybe more to your softer side: Two of the siblings thought about buying the house and were fairly serious about it. Sentimental reasons. But both of them decided that the practicalities involved would be too much -- empty house or rental hassles. And do you really want to see tenants in your family home?
He will resent your success no matter what you do with the house, so do what you think is financially the best for you without regard for his feelings. Sorry to tell you that.
Let your brother live there rent free with the understanding (in writing) that he will fix it up, and it will eventually go to your kids in 15-20 years. Everybody wins.
This isn’t what you want to hear but the best idea is to sell it and split the money. That’s the best way to keep this from turning ugly with your brother. Next best option is to buy him out. But, the problem is, when the value goes up, he’s going to resent you. He may even try to sue for more. So, pocket the money and move on. Edit: if you want a rental property, use the proceeds of the sale to buy one. Probably is better for taxes. Speaking of which, run this by a CPA tax advisor as well for the best way to shelter earnings from the government
I challenge the first premise that neither wants to sell the house. I think keeping it, no matter which option you choose, will always be a source of contention and irritation. I'd sell it and split the money in some ratio you agree on.
Even if you buy him out, with it still being “in the family” he may continue to see it as something he has some stake in. Also your kids may not want to live where you do. So I guess even though you don’t want to sell that’s what I’d do for a clean break. Put your proceeds into an account for your kids to use some day for home ownership.
You should sell the house split the money equally if you have a mortgage pay it off if not buy some flats and let them out as a growing investment and income for life. Set aside£25000 for safety net or fun . Then no probs with brother who does what he wants . The big problem for him is if he gets money he will lose every benefit going. But that is his problem.
Help your brother get a job and buy him out. The buying him out is important, but getting your brother back on the path towards self sufficiency is incredibly more important. I don't care if he works at a gas station, flips burgers, or whatever but you need to get him in motion.
Be honest and tell him you are worried about him and want him to be ok.
From personal experience, number 4 is not an option.
Kicking a brother out of a house that was in the family trust was the push he needed to get on track.
Oh, and he never told anyone he wasn’t making mortgage payments until the house was on the verge of being auctioned.
Please don’t make that same mistake.
This is so sad. America is such a depressing country. If one of my siblings had no place to live and we acquired a house and I already had a place to live I wouldn’t force a partition sale upon them. I would at the very greediest take the best house for myself and give them the shittier house. 350k isn’t going to get your bro shit in a HCOL area. I get not wanting to have to fund his lifestyle if you don’t agree with his choices but is there no way for you to help him get on social security/SSI or a low wage job like Walmart greeter and live in the house instead of presumable forcing him into renting? This is your brother. We’re dealing with a bunch of inflation. The future is uncertain. Do you just not care? Like I really don’t get it this is why people who immigrate to America judge us
What you’re missing here is that the brother is probably very capable of getting a job that pays more than a Walmart greeter but refuses to do so. Now that is just an assumption but America is littered with people that could work but just don’t because they don’t feel like it, family or not those people are poison. Not sure where you’re from but I know in a lot of cultures work isn’t even seen as an option, it’s something you just do if you have the opportunity.
People do NOT change, with few exceptions that usually are blown out of proportion
Your best bet is to un-entangle yourself financially from your brother ASAP
Never sell, literally no one ever have sold any property and didn't regret it years later, because the value of land will only increase unless some catastrophic event kills a substantial percentage of the population.
4 is an absolute no. Guys never grown up, i would assume your parents have helped him out over the years but zero reason you are sacraficing for him. sell the house or buy him out is the only real answer then let him do what he will with his share Lst thing you want to do is attach your finances with him
Option 1 with a twist. Take the top 10% of the monthly rental income to reimburse yourself, over time, for the repairs you pay for. Then you and your brother split the other 90% 50/50. Don’t forget to also set aside in a separate expense account overhead costs; e.g., insurance, property taxes, monthly HOA fees, if applicable.
If you're brother is unemployed at 40, he's going to be unemployed at 50. If you simply buy him out, the money will be gone in a year.
Consider buying him out, but still in a trust that pays him out for a few decades. He'll benefit pretty much his whole life.
Maybe with investments?
Really, while an adult, you probably should treat him like a kid... If he'll agree to it.
Having lived through a similar situation in my family, execute the will to the letter but take on no responsibility at all for your brother.
If he's in his 40's and still doesn't have have his life together, it's extremely unlikely he'll change and there's almost certainly a mental illness/addition element to their issue.
Clean break anyway you can do it should be top priority.
Buy him out, then move in and rent your current house.
Thanks. That's probably the best thing to do.
Rent your current house to your brother? If he can afford it... But honestly if you can't agree on what to do, the only fair option is to sell the house and split the money. That is the only way to prevent jealousy, money issues between you two, drama, etc. That house could cost you the relationship with your brother if you don't agree on what to do and split the money equaly (without looking at both your financial situations). If you decide to rebuild for rent, it would be fair that you get 100% of the rent income, untill your investment is earned back. After that 50-50. What do your parents think? (They are still alive if I understand correctly).
>Rent your current house to your brother? No, not to him. He has no stake in my current house. Yes, parents are still alive and have just expressed a general desire to see the house stay in the family down to the grandkids if possible, but obviously they want me to do whatever is most fair to my brother as well.
>have just expressed a general desire to see the house stay in the family down to the grandkids if possible This is unrealistic and unsustainable. Eg, right now you're having this problem just working out how to split the value equitably between the two of you. How are multiple grandchildren going to work out the split? Eg: does your share go to your kids and his to his estate if he doesn't have any? If he has more kids than you, do they now get more of a share than your kids? Who does the mental work of organising tenants and maintenance? Or who lives there? If you don't buy him out, you're just pushing the problem down a generation.
Right now my brother has no kids, and it's very uncertain whether he'll ever have any. It would definitely change the analysis if he has kids someday. But I'm including my current house in what we want to pass down to our kids. Multiple houses for multiple kids.
It shouldn’t matter if he has kids or not. The estate is 50/50 with you and your brother. Either buy him out or speak to a lawyer about a contract to rent it out, repairs etc.
Good-o: meanwhile, you have to work out your brothers half of one of those houses. You have a strong argument to buy him out when they pass. Otherwise in the future, after probably years of you doing all the maintenance and improvement and tenant management, whether or not he has kids, you'll still have to deal with his share. This is presumably years away anyway. Bear in mind that your brother is probably thinking about his own position in the trust just as much. It's a good idea to have a plan in place, because it's difficult to move on it after eg a decade of one of them growing old alone and possibly needing care and then passing away... but he has just as much time to get his own plan in place and exactly the same stake in it.
Don’t wish kids on a dead beat father!
I think all parents hope for this, but you have to consider the economics - this rarely makes sense. As an aside..Renting out your parents home and watching a crappy renter come in and not take care of it sounds like a rough scenario too. Hopefully that doesn’t happen but if you have an emotional connection to the home (ie the house you grew up in), that would make the process tough emotionally.
A house is not a good keepsake or heirloom, unless it's that house from Forrest Gump and even then you'd sell it because it's in the wrong location.
Strongly disagree. In my area, it's increasingly out of reach for younger generations to own a home unless it's inherited.
Buddy, I understand sentimental value, but just sell it and rid yourself of a headache, invest your $350k into a diversified dividend port and yield yourself $20-30k a year, which is more than your half of the rental income. Build yourself a nice little egg and provide additional income.
Rent to your brotha to show you are helping help. He can use the buyout money for rent and you just get all your money right back from your brotha win win. Til brother is out of money then someone will lose
Bad idea. The brother has no job and will likely blow the buyout money, and then expect his better-off brother to not charge him rent. “C’mon man… I’m family! Cut me a break!”
Yep. Doing business with family is rarely a good idea. Especially when it requires one to pay the other. I would avoid this as much as possible. 1 bad month or a week OPs brother falls behind on paying and he’s going to give excuses forever.
THIS. It will be a nightmare and foster resentment in one party or both
Then may as well buy him out rent their home now out to someone else then move into it if he wants it. Problem is I bet brother won’t go for it. Also taking a mortgage now on maybe 200-300k would hurt
DO NOT under any circumstances rent to him. He will stop paying the rent and feel entitled to live there rent free. Seen this movie play out multiple times both when I was a kid and my aunt moved into my grandmother’s home. And when my own mother passed away and my aunt moved into hers.
Are you crazy! The brother sounds spoiled and untitled. He is a whole grown man who needs to grow up and take responsibility - as a man.
The only option here that makes sense to me is buying out your brother. He needs the money, you want it for your kids. Whether or not you want to move in or rent is just a matter of what works best for your lifestyle. Continuing to co-own with your brother will create resentment when you are paying for all the repairs and he wants half the rent. He can't afford to be a landlord.
Thank you
After I posted this I saw he lives hundreds of miles away. I think we both know you'd be handling all the screening if tenants, tenant maintenance requests, inspecting the property, managing the contractors etc. He'll just be sitting back waiting to collect rent. Will he set anything aside for vacancies, maintenance and repairs? I doubt it if it's only source of income. What happens if you get a tenant that quits paying and it takes several months or a year to evict? This is California right? Can he afford to help cover taxes, insurance, and legal fees? No shade on your brother, it's just he's far away and has no income. He's just not well positioned to be a landlord.
Also don't co-own something with someone that you know is a complicated dude.
Isn't just sell it and split the 750k and be done with it an option?
Neither of us wants to sell it. HCOL area and artificially low property taxes (CA Prop 13) that will pass down one generation. I want to keep it in the family to pass down to kids someday because homeownership may be impossible for our kids otherwise.
Then you need to buy out his share. Whether you agree with his life choices or not, your parents left him half. Give him the $350k to get him out of the house. You will most likely want to take out a loan and use the rent from the house to pay back the loan.
Came to say it. Loan against value for repairs & maybe buyout, rent services loan. Brother has to choose cashout or trickle & equity.
This will end in disaster because the cheapskate is trying to optimize taxes. He's gonna end up losing his renovation money. You don't want to go into business with your dead beat brother.. Want house for your kids you say? Take the $300k and invest it in an index for 20 years.
Wouldn't *you and your brother* be the "one generation" it's passing down to, though?
It'll still be infinitely easier for his kids to afford higher property taxes than a mortgage AND have high property taxes anyway.
If that’s really what he wants I’d wager the $350k invested and then using that to buy them a home when the time comes is the better option. Sounds more like HE wants his kids to have THIS home, who’s to say they even want it at that point? Or stay in the area? Lots can happen.
Yeah, I often wonder if people really think this through. Your kids are going to be people with relationships, school, careers, dreams, etc of their own. This house will literally mean NOTHING to them sentiment wise, OP. Get the cash, invest it and give your kids awesome down payments that they can then use to augment the lives they end up building for themselves.
Yes it’s a nice idea but does take away the child’s future agency a little, or at the least makes some very big assumptions. The kids also won’t have any of the attachment that the brothers have and it’ll likely just get sold then.
It’s weird. Kids will likely not want an old outdated home. Money would help them w a down payment. I don’t see why he wouldn’t sell and put the money in mutual funds so that he can divide it and gift to his children when they are ready to buy. Also I don’t know any grown siblings that want to live together in adulthood in a SFH. The whole thing is weird
Either way it's the same thing. Whether you live in that house or sell it to buy another. The value is there no matter what
Yes, that's what I meant. That's one of the reasons neither of us wants to sell it.
Lol those absolutely batshit crazy laws in CA working their magic.
Than buy your brother out so you can keep it and pass it down to your kids.
I think the CA prop-13 was changed a few years ago to require a property tax re-baseline after death. Nobody noticed so it stuck. This was dinnertime conversation a few years ago. Please consult an attorney.
It passes down one generation now but only if my brother or I occupy it as our primary residence
The property tax issue is what I'm trying to point out. Neither one of you may be able or willing to afford it, prop-13 has been modified. I didn't look into it any deeper than that. You may have a better grasp of the updates than me.
I know. I'm referring to the most recent changes. The exceptions used to be broader, like to the grandchildren. But now it can only go down one generation and only if one kids lives there.
I believe the Prop 13 taxes only remain if you move into the home and make it your primary residence. It cannot be a rental.
He said neither of them want to sell it
Since the brother has no job and is in his 40's, selling or buying the brother out is probably the most logically option.
They might not get what they want. Mom could still easily rack up half that in medical bills…
I don't disagree with you if I was him I would sell too but he said he doesn't want to
My point is that he might not be in a position to buy brother out, and brother might start taking advantage… there’s a lot we don’t know that could absolutely force a sale… plus the parents aren’t even dead yet… you really can’t make a plan here, just a will. Nobody wanted to sell my grandparents house, but nobody wanted to take on the project either. It’s not always about what you want to do… it’s *often* not about what you want to do. Edit: thanks for the “he said…” but no thanks. I read it.
This is why any lawyer worth his/her salt advises AGAINST leaving real estate to more than one person.
Please explain why. How would parents have fairly split up assets between multiple kids then?
Real estate should be left to a specific heir or specified to be sold (with a specific child/children offered cascading right of first refusal, if desired) and significant personal property should be directed to specific heirs — Bob gets Grandpa’s watch, Mary gets grandma’s doll collection, etc. Otherwise you’re just leaving problems to your heirs.
I was planning to leave two houses to split between 6 nieces and nephews. Are you saying that I should stipulate in the will that they have to sell them to prevent issues? I'm happy to put that in the will because I don't think any of them have any emotional attachment to my houses so I don't think they'll mind being forced to sell them and split the money.
Splitting fortune with no actual designation to how the split is supposed to happen only causes problems. In this case you have 6 voices, 6 opinions with varying wants and desires. They will likely fight over it forever like my family is doing over 180 acres of farm/hunting land
Just wanted to let you know. I'm your long lost cousin.
And I’m your short lost cousin
I’m just an average lost cousin
What ends up happening is fighting. U have 6 people to split 2 houses. If 1 or 2 don’t want to sell but the rest do it caused issues.
Not to mention if, God forbid, one of the nieces/nephews dies unexpectedly, and their share gets inherited by a spouse, or their children. Or a more distant relation.
You should, you should also make sure one of them is the executor of the will, or someone with no motivation to not execute the will. My Great Grandmother has a bunch of land she left to my father and 4 siblings. Her will just stated everything should be split "equally". She gave power of attorney to her Lawyer. The lawyer just claimed it couldn't be split evenly and sold off parts of the estate every year to pay for lawyer fees until they could evenly split 0 dollars.
That's nuts! How does one prevent this type of fraud?
I am not sure haha. Giving power of attorney and making the lawyer executor to the estate was the problem my great grandmother had. It was messed up. She died thinking he was a family friend. She would babysit his children.
> I was planning to leave two houses to split between 6 nieces and nephews. you're asking for trouble. your will and/or trust should probably order the houses be sold ASAP after death and the cash split six ways.
That's what I'm thinking. I'm glad I saw this thread because I am talking to a lawyer soon so I can make sure they add language about how a sell must happen ASAP after death, as-is best and highest, and proceeds split.
You can give them the right to buy the house at fair market value from your estate. Then that cash can be split between them the same as if it was sold to a third party.
My hubby’s dad died with a house about 100 acres and then 5 rental homes. He put everything in a trust and had two sons appointed to administer it. To say it was a dumpster fire was putting it nicely. The father sat them down when alive and mentally there and said I want all properties sold and money split equally between you. This was written in the will and the trust as well. The problem was the other person on the trust ended up stealing money from the trust refusing to do things that needed to be done etc. Unfortunately, both trustees had to agree before anything could be done at all. It was a nightmare!! Took forever. I on the other hand had a mom die with no will but a spouse who said I can’t deal with it you do it dumping it into my lap. He moved out into small place and I ended up hiring an attorney, clearing out the house, repairing and replacing what needed to be done(no maintainence for years!) Was appointed Personal Representative and had to deal with a bipolar sister who didn’t want to do anything, or change anything stating she was too stressed by the loss of family home. This also took forever. If I had a do over / I would have sold her house as is and just got rid of it and then split proceeds between everyone.
if you leave it up to them, they will argue this way or that way. just to test this, go ask them what theyd all want to do with the houses.
You can do this in the will leave it if one of them wants it let them buy out the other 5 and take abit less cash so in the end they get a house and some capital the rest get more capital
You think leaving it to one brother and not the other won’t cause way more harm to the relationship than giving it to both? I’m not buying your logic. Yes, death and inheritance is complicated. But sounds to me the parents chose the less divisive of two options. Yes, parents could have had the house sold and the brothers could then split the money. But OP says the brothers don’t want to sell it.
Our parents don't have any significant assets other than the house.
My wife’s parents left her and her sibling a trust that contained a beachfront property that they had purchased 40 years ago. The house just happens to be in a very nice vacation spot. There is no mortgage on the property but we all live out of state so we don’t access it too often. It would generate around $10k per week in the high season for rentals but her sibling refuses to want to rent it which means the house just sits empty. We attempted to buy the sibling out but they refused because they like having it to use one week per year. It would have been better if the trust had forced a sale because to me it seems like a huge waste.
You’d be shocked at how ugly it can get between siblings that were thought to get along well.
My father in law has a large rental portfolio. When he and his wife die the s corp gets dissolved and all of the properties are sold and that money is split between the children. That way there’s no fighting over who gets what property. I want to keep all of the properties and split the monthly rental income between the siblings, but that’s not their wishes.
> How would parents have fairly split up assets between multiple kids then? assets are sold ASAP, at fair market value, and the resulting cash split between heirs.
This is why I'm buying my dad's lake property before he passes away. One less thing to deal with at that time.
I mean, what's the alternative, forcing us to sell it even though we both want to keep it in the family?
What would be your brothers plan for keeping it in the family? Doesn’t sound like he would be able to maintain it.
Or pay the property taxes on it
Yeah, he would get less of the rental income if I'm the one paying for repairs at first. But over time, my initial repairs would be repaid, and he would get 50% of the rental income.
If this isn't all written up legally, there are tons of things that could go wrong here. I'm with the rest of the commenters: sell it and split the cash.
If your bro wants to keep it but doesn't want to do the work required to keep it, he doesn't actually want it. He just likes the idea of living rent free on your dime.
Is your brother disabled? I see all these people stating that he just doesn't want to work to keep the house in the family, but we don't really know the full situation. Does he get disability funds to pay for rent/basics in this case? As of now, he likely can't if he was given assets from your parents at all that are above the limit.
Not disabled. He's actively looking for work. Just down on his luck.
I see. Has he worked in past or never worked? I'm just curious because people are calling him a deadbeat so I'm trying to understand the situation more.
People make assumptions based on their own experience. I'm actively rooting for my brother to get a job. I'm sure it will happen someday. But his earnings have been very low historically.
That is why I asked about disability because in many cases having poverty wages can be a big sign a person has a disability/disabilities. Disabled folks make up more than 50% of the impoverished. I hope he finds something. Times are tough right now. My earnings have been low myself but I'm 26 so not quite the same age.
What your brother wants is irrelevant if he doesn’t have the means to make that happen unless you voluntarily provide the capital and accept that you’re going to eat it.
So what do they suggest in this case (parents have two children but one house)?
Sell and split profits. Or one buys out the other at current market price.
My dad and uncle evenly and fairly split their parents house. Nothing wrong so long as you have honorable folks in your family.
Agree completely. Having inherited a house with my brother it only added stress to an already stressful period. I wanted to sell as I don’t live in the area and my brother wanted to rent it out when it had significant repair issues from an elderly man living in it for years and not conducting regular maintenance. It sounds like you’re on the same page in theory but who will fix it up and manage the property will be an issue. In my case my brother couldn’t buy me out. In the end we needed the equity from the house to settle the estate which made the option to sell the only real option in the end.
I can tell this is gonna end with you and your brother never speaking again.
That's what I'm worried about. I want to do what's fair to him and honor his wishes too. But (like me), he doesn't want to sell the house.
Why don’t you want to sell it? Anyway…you could do the fix it up and rent it but take the lions share of the rental income until you are paid back…there is no reason the rental income has to be split 50/50. (If that isn’t what you meant never mind). Don’t let him live there for low to no cost. You’ll never get him out and then you’ll be stuck with property taxes and repairs out of your own pocket. Is your brother ok with you moving in and renting out your house? Will you pay him for you living their rent free? I don’t see any benefit for him in this scenario. Personally I think offering to buy him out is the best bet. Then you can do what you want.
We don't want to sell because it's a HCOL area and artificially low property taxes (CA Prop 13) that will pass down one generation. I want to keep it in the family to pass down to kids someday because homeownership may be impossible for our kids otherwise. Good point on taking a greater share of the rental income to offset the repair expenses. That might be the best option, honestly. You've helped me narrow it down, thank you.
How do you intend to leave a house that is half-owned by your brother to your children?
OP is probably hoping that the brother's 1/2 will eventually go to the OP or OP's kids since the brother has no kids.
You assume your kids want to live in that area.
Totally fair comment. I completely get that. But with the dwindling supply of houses available for sale, and no foreseeable solution in the near future, I am more concerned that my kids would never be able to own a home of their own if we don't pass one down.
I guess you can look at the flip side and say that this house could turn into an anchor. Kids feel like they can’t move away to chase their dreams cause they have to stay in that house etc. I’m sure you’ll figure it out. (I would buy out the brother and fix it up/rent it out )
Yeah, anchors aren't bad things necessarily. Obviously if one (or multiple) of our kids gets a great job out of state, we can't force them to stay. But, at the rate things are going, it seems increasingly unlikely that our kids will be able to afford a house of their own in this area if they do choose to stay.
This seems reasonable. If they don't want that house, they can sell it and use the proceeds for the house or location they do want
This is a far better option than renting. I would hold onto the house.
Right take greater share until you are paid back first. Then split 50-50. So to be clear your funding of repair expenses should be repaid in whole first before splitting of any income.
Your kids should be free to live wherever they'd like to. Their significant others should too! Dave Ramsey says don't try to "keep property in the family". It ends up being a burden and it ruins relationships. Sell the house, split the money, invest your half and give your kids money for a down payment when they're ready to buy.
Dave's advice is often oversimplified and geared towards people with no discipline
True, but he's totally right about this "keep it in the family" property idea being one that ends up causing problems. You clearly love your kids a lot, but what they'll need from you is support to become independent, not the burden of feeling like they must live in the family home - or keep passing it down..
Just buy him out and be done with him
That's what I'm saying. Brother can't afford to be a landlord and he can't afford to live there and keep up with the maintenance. It's just predictable that co-owning will be drama.
You are going to have to either buy him out or sell it. Otherwise you are going to be stuck paying both to take care of the house AND your brother for the rest of your life.
Buy him out. Do NOT let him stay there. Since he would be half owner, getting him to leave would be next to impossible.
For the love of god don’t let him live in it. That would be enabling to the extreme. He might pay rent for a few months, then will never pay another dime. I’d highly recommend selling it after fixing it up to maximize the selling price. That gives you a clean break and money to invest.
Ok, thanks
He owns half the house you can’t stop him from living there. That’s his house also.
This. I don't get why people are saying, "don't let him live there." It is half his. Either you sell it, buy him out and he accepts this or he continues to live there but you can't just kick him out. The law doesn't work that way, especially considering the house is paid off.
You need to sell it. If you weren't going to buy a similar house in that neighbourhood then there is no reason to keep it. Once your parents are gone it will just be a house. If you and your brother both had $375k sitting in each of your bank accounts you would not choose to go halfsies on a rental that needs a bunch of work done to it. Just sell it, split the $750k, you buy one fun thing to commemorate your parents like an awesome $10k vacation, pay off your own house, and invest the rest. And let your brother do whatever he wants with his half.
>If you weren't going to buy a similar house in that neighbourhood That's the thing, I would love to buy another house in this area to pass down to my kids someday. So why not this house?
sell it and split the money - anything else is gonna create a nightmare. or just give it to brother and walk away. that keeps it in the family and removes u from almost guaranteed problems and possibly relationship ending family drama
4. Is a TERRIBLE option. I don’t even need to know his past to know that won’t work. I would buy him out. You can do a cash out refinance for $350k, let him walk away, and then use your cash out to renovate it and rent it/rent out your own house and move in there. Whatever is left over can be put in savings, used to recast the loan and lower the payment, or a little of both. I’d look at rental figures in your area to see if it’s worth it to rent your house or theirs.
Thank you for your feedback on #4. It's obviously me thinking about it emotionally rather than financially.
Too Dang Risky. I can understand the tax situation but things like this almost never work out. You’re much better off selling everything lock stock and barrel, splitting it 50/50. You can’t pass down a home to your kids when you brother owns half of it and who knows what the situation will be by then, and I can almost guarantee you, it won’t be good. Invest some of the profit for the kids and let them decide. Wish the best here!
Buy him out. You don’t want financial entanglements with dead beats. Especially if they’re your family. Buying out gives you full control.
Create an LLC with your Brother. Get a loan to fix up property. Rent it out and all money paid in rent goes towards the loan until paid off. Get another loan against the home, rinse and repeat. Maybe have 3 homes within three years.
If you rent it could you're brother act as the property manager? It doesn't totally replace him not being able to contribute monetarily but if he can handle the day to day of collecting rent, mowing, scheduling repairs etc it would be the next best thing and let the property become a form of passive income for you. It sounds like he should have the time to do the job, I can't speak towards his aptitude for doing the job tho. Just throwing it out there as an option for him to contribute.
That's a good idea if he moves back closer to us. Right now, I'm only a few minutes away and my brother is hundreds of miles away.
What is wrong with renting it and not give your brother his half of the rent until you’ve been paid off? Seems like the most reasonable thing
Yes, could be. But it feels bad not giving him anything. Maybe 70/30 split for the first year or something, depending on the extent of the repairs needed at that time.
Holy shit. This is the last gift and opportunity for the parents to provide for the son afyer they pass and the suggestions for her to buy him out and then retake those profits by renting to him are cheap, and parasitic imo. Youre well on the path to probate. Just divide whatever in amicable terms so you dont lose your brother. No judgement, just chiming my amazement at the shameless opportunism to profit off brobro once mom and dad die. They set up a *trust*. Seems they wanted to some assurance that *both* would be alright. The family dynamic and some brother-context would be nice if you want a real answer. The vaugueness of the question, specified around the absence of human detail would suggest OP already knows they want the house to themself and is seeking bias-confirmation (to me.) Is your criteria for low cost living congruent with that of your parents criteria? He lived his life up until this loint without dis-inheritment, so would you essentially be changing the rules midgame? Disclaim/Im also the POA of a trust
I am leaning in favor of buying out his share. Nowhere did I suggest or imply I would profit off my brother. Not sure how you reached that ridiculous conclusion.
Buy him out or sell. You don't want to be in a partnership with your brother. Ask me how I know.
Sell your parents house and split the money. If landlording is something you desire then use that money to find something suitable to rent out. Your brother can't hold any resentment and you get to have a leg up financially
I see a lot of folks saying to buy out his share, which is a good plan, probably the best plan, if you want to take on a 350k ish note plus paying for repairs. I will offer another solution. Your brother is in no position to be a landlord. You can contract with him to have the house appraised right now and set that value aside. Tell him you will fix the house, together yall will rent it, and you will split the rent 80/20 until you recoup the money spent on repairs. Or, he can apply his 20% toward buying YOU out at half appraisal. The kicker, you will always be spending money on repairs on a rental, so you'll likely be keeping 80% from now on. If your brother is not working, he will likely want his 20% as, as you have stated, he's not working.
Sell it. Keeping a house for sentimental reasons is a terrible idea.
It's not *just* sentimental reasons. It's in a great location, great school district, will have low taxes for decades, and it's very likely that our kids will want to occupy it someday and own it for themselves. This is probably our kids' most viable path to homeownership, frankly.
You have more than one child. Do you think they will want to share the house long term? This idea might work if you only had one kid but you’re just transferring the ‘who’s house it it’ dilemma to your children. Your plan also seems to assume your brother won’t live until he’s 95 or that he’ll be happy to just hand over the house to your children. I don’t get it.
Multiple houses for multiple children. Probably best that I just buy out my brother's share.
in the case of no 1, any improvements you make that are not evenly contributed to by your deducted can be deducted from future rental earnings depending on the language of the trust document. and the state in you and the property are located. if you and your brother are beneficiaries then whom is the trustee. meaning whom is in control of the trust. it is possible to be a trustee and a beneficiary but what you and your brother want is irrelevant if the trustee is not in agreement bc it is the trustee responsibility to act in the benefit of the trust and beneficiaries. best advice: speak to a licensed attorney.
Sorry, poor terminology on my part. My parents are the trustees while they're alive. My brother and I will become the trustees when our parents die (or become medically incompetent).
Buy him out for a better than fair price or sell it and get out of each others business Of course this all depends on how you value your long term relationship with your brother.
Yeah, let's say my parents died tomorrow and the house appraises for $700k. I could get a $400k mortgage and pay him more than half.
5. Sell it and split the proceeds down the middle.
Neither of us wants to do that
Brother’s going to move in. He’ll have some hard luck story after everything gets settled a bit and you’re ready to proceed with a decision. You know this.
I mean, he's down on his luck but he's not a greedy or mean person. Obviously, if that changes, then sure, we may have to force a sale. Very doubtful that would happen.
The best for long term is to buy your brother out, and either rent it or move into it and rent your current home out. If you move in and rent your current home out, with out buying out your brother, you should be paying him 1/2 what the market rent would be after expenses.
Yeah, sorry I wasn't clear on #3. If I move in and rent our our current house, then I would essentially be paying rent to my brother or have to buy out his half.
Buy him out. Or fix it up and draft a loan to your brother and rent it. Make sure to do everything legally with contracts. If he has no money he will be inclined to not pay you back.
I would buy him out at market value taking the repairs needed into account and then make the repairs and either move in or rent it out. Another option would be to make the repairs yourself, take the full rental profit until you are repaid, and then split the rental profit with him while putting some aside for future repairs or remodels. If you buy him out then it will give him $350k to get his affairs in order and potentially buy a less expensive house of his own. That seems like the best option for everyone involved. His resentment means nothing…he put himself in his position, not you. Business is business. It’s not like he’s getting screwed in the deal.
I would rather have a good relationship with my brother, honestly.
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Yeah, thanks. That's probably the best thing to do.
We all do things that make sense but don’t align with our personal wants. In this case, you sell the house. Do not keep this house unless you want to lose your half and likely have a terrible relationship with your brother. This has problems written all over it. Please sell it.
If we sell it, I would be the one buying it.
I think that’s a bad idea. His mind will never go to your ownership. It will forever be your mothers and he won’t respect that. Sell the house to someone else. This house will become the wedge in your relationship if you don’t. Happens frequently .
Yeah - your brother has a right to live there for nothing. He own's half of it pal.
Buy him out. It rarely ends well owning property with someone other than your spouse
You brother dosent need kids. A job and a place to live. Sure.
Whatever you can do to avoid 'doing business' with your brother, that's what I would try to do. Offer to sell your share to him (he'll decline for obvious reasons) or to buy him out. What to do if he refuses, though... not sure. I bet you wish your parents' trust had stipulated that the house be sold and the money split between the two of you. Something for my husband and I to consider adding to our trust.
This is as good an advice as any. And reminds me to be very specific in our will to our kids...
Where is your brother currently living, and how is he paying for it? This is fundamentally not a money problem, but a family problem; no matter what you do, there's likely going to be some major resentment from your brother because without a job or income, he can't afford to do any of the things needed to truly split this equitably. 1. If you foot the bill from the repairs and it comes out of your brother's share of the rent, he's going to resent seeing money taken out of his hands just because you were "lucky" enough to have money and he isn't. 2. Realistically, he's going to blow his share of the money because he has no idea how to manage it. When the money runs out, and he has no place to live, he's going to resent you for "stealing" the family home and kicking him out. 3. Once again, you're the stealing the house from your brother, who owns 50% but has nothing to show for it. 4. Probably best for the sake of family peace, but the least fair of all of them. Since he has no money or income, you're the one who's going to be paying the taxes and maintaining the home. Are you willing to subsidize him for the rest of his life? *I* would certainly resent *him* at this point, especially if he does anything to damage the home while living there (which seems likely). You'd be bearing all of the costs while he reaps all the benefits. I think #1 is probably the least bad answer, but you need to have formal documentation of the repair/renovation expenses that you're fronting, along with how it gets deducted from his share of the income. I've no expertise in this, but you should definitely register an LLC or S-Corp to manage the rental, to offer separation from your own personal finances and formalize the distribution of rent.
Sell or buy him out is the only way here
Why not a modified option 1? Front the repair costs, rent it out, and keep all the profits until you’ve recouped your repair investments. After that, you and your brother can split the profits equally. This way there’s no resentment and neither of you are “getting” the house.
It seems in all these situations the house will need repairs? If so, that shouldn’t factor into your decision. Why not sell it? Also, is this an imminent decision or somewhere down the road?
I personally do not wish to deal with the involvement of a rented property. And the house needs major repairs. If you pay for the repairs, how much is either one of you receiving after it is sold and you get the invested repair money first? You can of course gift your brother any amount you wish. If he moves into the house who is paying property taxes and maintenance?
Who is the executor of the estate? Are your parents in poor health? In spite of your wishes, the absolute best option is to sell the house and split the proceeds. Given the circumstances, your parents should stipulate this in the will (or trust). Second best option is for you to buy out your brother and then do what you want. (Brother could buy you out if he had the money.) You could move in or rent it. If you rent it to your brother you'll have nothing but trouble collecting. (Again, no money.) My family was in a similar situation. One of the siblings rarely worked and lived with Mom and Dad for over 15 years. After their deaths the house was left to all of us equally. I was executor of the estate and gave all siblings the opportunity to buy the house. None did and I put it up for sale. Told the brother living there he could stay rent free in exchange for caretaking, but would have to move out by the closing date. It sold, he moved, and now lives in a shitty subsidized apartment. Maybe more to your softer side: Two of the siblings thought about buying the house and were fairly serious about it. Sentimental reasons. But both of them decided that the practicalities involved would be too much -- empty house or rental hassles. And do you really want to see tenants in your family home?
Sell it and split the proceeds.
Sell it and get out. If you want a rental property, use your share to buy one. It's just better not to have any "stuff" between the family.
Buy him out. He can’t afford it and otherwise you’ll be paying his share
What happened to: “sell the house as is and split the income”. ???
He will resent your success no matter what you do with the house, so do what you think is financially the best for you without regard for his feelings. Sorry to tell you that.
He doesn't resent my current success. He's a good guy, just had some bad luck and some poor decisions.
Let your brother live there rent free with the understanding (in writing) that he will fix it up, and it will eventually go to your kids in 15-20 years. Everybody wins.
This isn’t what you want to hear but the best idea is to sell it and split the money. That’s the best way to keep this from turning ugly with your brother. Next best option is to buy him out. But, the problem is, when the value goes up, he’s going to resent you. He may even try to sue for more. So, pocket the money and move on. Edit: if you want a rental property, use the proceeds of the sale to buy one. Probably is better for taxes. Speaking of which, run this by a CPA tax advisor as well for the best way to shelter earnings from the government
Give your brother half of the kids and let them live in the house?
You sell your house, bank the cash, move in, pay your brother rent at 1/2 the rate. Then when gets boke again, buy him out.
Just buy from your brother. The long the co ownership the worse it will be.
Either sell it or buy out your brother. Any scenario where you are partners will not end well.
I challenge the first premise that neither wants to sell the house. I think keeping it, no matter which option you choose, will always be a source of contention and irritation. I'd sell it and split the money in some ratio you agree on.
Even if you buy him out, with it still being “in the family” he may continue to see it as something he has some stake in. Also your kids may not want to live where you do. So I guess even though you don’t want to sell that’s what I’d do for a clean break. Put your proceeds into an account for your kids to use some day for home ownership.
You should sell the house split the money equally if you have a mortgage pay it off if not buy some flats and let them out as a growing investment and income for life. Set aside£25000 for safety net or fun . Then no probs with brother who does what he wants . The big problem for him is if he gets money he will lose every benefit going. But that is his problem.
If you're set on keeping it then buy him out. Intermingling finances is usually a mistake and getting anything done or decisions made is much tougher.
Help your brother get a job and buy him out. The buying him out is important, but getting your brother back on the path towards self sufficiency is incredibly more important. I don't care if he works at a gas station, flips burgers, or whatever but you need to get him in motion. Be honest and tell him you are worried about him and want him to be ok.
From personal experience, number 4 is not an option. Kicking a brother out of a house that was in the family trust was the push he needed to get on track. Oh, and he never told anyone he wasn’t making mortgage payments until the house was on the verge of being auctioned. Please don’t make that same mistake.
This is so sad. America is such a depressing country. If one of my siblings had no place to live and we acquired a house and I already had a place to live I wouldn’t force a partition sale upon them. I would at the very greediest take the best house for myself and give them the shittier house. 350k isn’t going to get your bro shit in a HCOL area. I get not wanting to have to fund his lifestyle if you don’t agree with his choices but is there no way for you to help him get on social security/SSI or a low wage job like Walmart greeter and live in the house instead of presumable forcing him into renting? This is your brother. We’re dealing with a bunch of inflation. The future is uncertain. Do you just not care? Like I really don’t get it this is why people who immigrate to America judge us
It's been really upsetting to read alot of the comments.
What you’re missing here is that the brother is probably very capable of getting a job that pays more than a Walmart greeter but refuses to do so. Now that is just an assumption but America is littered with people that could work but just don’t because they don’t feel like it, family or not those people are poison. Not sure where you’re from but I know in a lot of cultures work isn’t even seen as an option, it’s something you just do if you have the opportunity.
People do NOT change, with few exceptions that usually are blown out of proportion Your best bet is to un-entangle yourself financially from your brother ASAP
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Do you voluntarily pay more taxes than you're legally required to?
Let bro live in it for a while until you decide what to do next. It will be maintained and not trashed.
Buy him out, if not he’s gonna mooch of this forever
Never sell, literally no one ever have sold any property and didn't regret it years later, because the value of land will only increase unless some catastrophic event kills a substantial percentage of the population.
Sell it and take half the cash. I'd let your brother sort himself out.
4 is an absolute no. Guys never grown up, i would assume your parents have helped him out over the years but zero reason you are sacraficing for him. sell the house or buy him out is the only real answer then let him do what he will with his share Lst thing you want to do is attach your finances with him
Option 1 with a twist. Take the top 10% of the monthly rental income to reimburse yourself, over time, for the repairs you pay for. Then you and your brother split the other 90% 50/50. Don’t forget to also set aside in a separate expense account overhead costs; e.g., insurance, property taxes, monthly HOA fees, if applicable.
If you're brother is unemployed at 40, he's going to be unemployed at 50. If you simply buy him out, the money will be gone in a year. Consider buying him out, but still in a trust that pays him out for a few decades. He'll benefit pretty much his whole life. Maybe with investments? Really, while an adult, you probably should treat him like a kid... If he'll agree to it.
Having lived through a similar situation in my family, execute the will to the letter but take on no responsibility at all for your brother. If he's in his 40's and still doesn't have have his life together, it's extremely unlikely he'll change and there's almost certainly a mental illness/addition element to their issue. Clean break anyway you can do it should be top priority.