Buying an investment property with mother for my father to live in

Considering buying an investment property with my mother and just looking for some advice about things we may want to consider. My mum and dad are separated for many years and my mum has recently sold her house. She will make approx 100k profit after buying her new house and paying all fees etc. She doesn't have a proper pension as she worked in my dad's business for many years but has a half time teachers pension which then precludes her from state pension. Therfore she is planning to invest most of this money for her pension.
However, my dad has recently returned to Ireland and while he is not entitled to anything from the profit he would like a contribution to buy an apartment. My mum has offered to give him 25k if we can raise the remainder and keep the property in my mums and my name. There is an apartment for sale for 90k which he likes. What are our chances of getting a mortgage on an apartment? We already have a house and bought at the right time so no negative equity. My husband and I are also on approx 15k extra per annum since we got our house mortgage.
My dad would pay us rent and we would obviously pay tax on this. Is there anything to stop us from offering him a below market rate for the rent as we just want to cover the mortgage and tax?

Any advice on things we may need to consider and answers to questions above would be appreciated

What is your mother's primary objective here?

1) To settle a legal claim which her ex husband may have?
2) To help a friend (her ex-husband) with accommodation?
3) To fund her own long term retirement?

What is your objective here?
1) To help your father with his accommodation?
2) To help your mother deal with your father?

It seems to me that your mother should look after herself first and foremost. She should not be putting her money at risk looking after her ex-husband, unless she has a legal obligation to do so.

You should not buy a property jointly with your mother. That is just too messy. If you want to buy a property to let to your father, then your mother should lend you the money or the deposit and let you repay it over time. Why does your mother not lend you the full €90k and you pay her the mortgage rate of 4.5%? She would not be able to get as good a return by investing it herself.

Thanks for your response Brendan.

I think my mum feels sorry for my dad and wants to feel she has done her part. He has signed a form in solicitors saying he doesn't want anything from sale. My dad is atrocious with money and went bankrupt with 2 businesses so instead of giving him cash my mum thought about buying an apartment and having an investment for herself. My dad was diagnosed with bowel cancer in April and returned to Ireland after living in India for 10 years. The doctors are happy with treatment so far and are satisfied they have caught it early. This is part of why she feels sorry for him. So I think my mum was hoping to do all 3!!

For ourselves. My dad has been living with me since April and I don't know if my partner would want my dad here full time. The rent on properties locally are about 750 + whereas if we bought an apartment then we were thinking we could offer it to him for 500 a month which would help him financially while also helping him to remain close to family who can support him

Why do you think it would be messy to buy a property with my mother? Just wondering what we need to think of? I hadn't thought of her lending us the deposit and think that is a great idea. I don't think she would want to give the full amount as think she wouldn't want to have all her money tied up helping my dad even if it is a better return.

Do you think banks would lend the remainder for an investment property? We have a mortgage of 250k on current house- current value approx 320k. My salary is 53k while my husbands is 45k. We have no other loans and approx 10k in savings

I am not a solicitor, but this is my understanding of the legalities: While your father may relinquish his interest in the house, as he is still married to your mother, your mother has a legal obligation to support him. Just bear that in mind in case it gets nasty.

Will your father be able to afford the rent? Or will he get rent allowance? If he gets rent allowance, you might get the full amount.

Why do you think it would be messy to buy a property with my mother?

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Mother + daughter + son in law own a property together
Tenant is separated husband
Tenant is bad with money
Rent is below market rate

And you ask why it might get messy? Here is the list
1) your father stops paying the rent and refuses to leave
2) you have problems paying the mortgage
3) your father claims that he has squatter's rights
4) You split up with your husband and he is a joint borrower with his mother in law for a property let at a cheap rent to his father in law

If you can repay a mortgage to the bank, you can repay a mortgage to your mother. Your mother should lend you the money. She will get a better return than she would get elsewhere. She is not tying up the money helping your dad. She is giving you and your husband a loan at market rates.

What age is your mother? Perhaps she should be contributing the maximum to a pension fund? If so, then lending to you might not be a good idea.

Thanks again for the advice.
My dad gets approx 1500 a month between state and personal pension. Doyyou think he might get rent allowance and who would he talk to about that?

I see what you mean about it getting messy!!
My mum is 63. She gets about 1000 a month from dept of ed for her pension and that is after she bought back avcs. My mum says that she paid into the private pension for my dad so there is a bit of bitterness about that. She thinks she may get approx 100 a week from state when she is 66 from some pieces of work that she did. Do you think she should be considering a pension fund?

laobhise said:

My mum is 63. She gets about 1000 a month from dept of ed for her pension and that is after she bought back avcs. My mum says that she paid into the private pension for my dad so there is a bit of bitterness about that. She thinks she may get approx 100 a week from state when she is 66 from some pieces of work that she did. Do you think she should be considering a pension fund?

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You should probably start a new thread in a Case Study format for your mother.

But if her current income is €1,000 a month, no she should not be contributing to a pension fund as she is not paying tax.

Brendan