Buying a relative's house and giving right of residence

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arbitron

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A close relative has paid off his mortgage but has very limited income.

We are looking at buying his house and giving him right of residence so he will get a large lump sum tax free and live out his last few years in comfort. He is a widower with no children. He worked hard to pay for his house and I don't see the point in him leaving the house to distant relatives when he could have the cash himself now and have a comfortable last few years with a guaranteed roof over his head.

We are planning to buy an investment property anyway and were actually looking in his area, so it suits our plans also. We can comfortably cover the cost of the mortgage each month, so we wouldn't be dependent on rental income. We already help him out financially.

We have spoken to broker and solicitor who are getting back to us soon with advice.

Has anyone done anything like this before?

Are there any potential problems that we may have missed? Please don't be shy with comments/criticisms!
 
I'm reminded of the French lady who outlived the man who had bought her apartment,and died at 122!
But seriously,what if your circumstances change?
You are left with a financial millstone with no return(unless you are proposing to charge rent?)
Does the property require expensive repairs?
 
Given his medical history it is very unlikely (which is one of the reasons I reckon he should take himself on a round-the-world cruise, etc.) but you never know!

We have a good deposit so the LTV is low and the mortgage repayment will be small. Our circumstances would have to change drastically for it to affect us. Of course they could change drastically and we could lose our shirts, but we would have to accept that with any investment. At least if we go bust and the house is auctioned his right of residence can't be touched so he would be relatively secure.

The house is in good shape, we look after that already.
 
I think you are been very kind to him. If God forbid your financial circumstances were to change in the future,. Could you build on a self contained apt or do attic conversion so as to enable you to rent out the rest of the house?
 
He has been extremely good to all my family. I wouldn't have made it through college without him. There isn't really room for granny flat, no.
 
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