On paper, a multigenerational home can sound perfect. You get to live closer to your kids and grandkids, and they can help out as you age in place. But reality often proves more complicated.
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Keep these tips in mind before making the huge commitment of buying a multigenerational home.
Consider Both the Financial and Family Angles
You’ve probably thought about the financial implications. After all, a home is the largest asset for most Americans.
But how do your adult children feel about living with you? How long do they want to stay? Who would live where? How would you share access to shared living and outdoor spaces?
“I once helped a retired couple move in with their daughter, son-in-law, and three grandchildren,” said Realtor Evan Harlow at Maui Elite Property. “We talked about what daily life would look like, where they want to eat in the house, small things that can become flashpoints.”
Buying a home is a long-term commitment, but your adult children could opt to move out after just a year or two. That could leave you with a larger home — and larger costs — than you want in retirement.
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Have Hard Conversations About Money Early
Sit down with your adult children to discuss everything from who’s going on the deed to who’s making the mortgage payments to utilities, property taxes, repairs and maintenance.
“You will likely have a larger mortgage, but also higher costs for everything from property taxes, to insurance costs, to maintenance,” said Adam Hamilton, CEO of REI Hub. “If that’s something you want to take on all by yourself, discuss it with a financial planner before committing. If it’s something you want to take on with other family members, look into different split mortgage and ownership options.”
Estate planning also enters the picture. Discuss what happens to the house in the event of death so there’s no ambiguity later.
Divide Responsibilities Early
Who’s going to mow the lawn? Cook shared meals? Scrub bathrooms? Fix the toilet?
Again, everyone needs to get crystal clear on who’s responsible for what. That includes a conversation with older children and teenagers about their responsibilities.
The conversation doesn’t end at housework, however. As you age, you may require significant care. Don’t assume your children will drop everything to take care of you.
John Enwere, certified nursing assistant and founder of senior care company Caringene, sees these family misconceptions play out all the time. “Adult children have jobs and grandkids have school, often leaving older adults alone. I’ve had clients live in multigenerational homes who expected round-the-clock care from their family, only to have to hire professional help like ours,” he said.
Ensure Separate Living Spaces
Word to the wise: Don’t share the same living unit as your children and grandchildren.
“Two completely separate living areas make a big difference when you want privacy,” explained Erin Hybart, Realtor and creator of ADU Connection. “One day, the second unit could also work as a rental, which adds value and makes it easier to sell in the future.”
Plan for Aging in Place
Most older adults buy multigenerational homes with the intention to age in place. Make sure you either buy or retrofit accordingly.
“Getting wide doorways, a first-floor bedroom suite and low-maintenance finishes are more important than you think,” Harlow said. “Buy a property based on the family dynamic and needs you’ll have in ten years, not just the one you have today.”
Create Contingency Plans
Curveballs will come your way and your children’s way. Talk through exit strategies, including contingency plans.
Either you or your adult children might be forced to move out, so talk through each scenario. Do you keep the property and rent out the other unit? Sell? Do the ownership percentages change? What about the responsibilities, both financial and otherwise?
Realtor and investor Jacob Naig of We Buy Houses in Des Moines urges boomers to plan for “what-ifs.” “Design your arrangement with your children to be flexible, not perfect,” he said.
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This article originally appeared on GOBankingRates.com: 6 Financial Tips Boomers Should Consider Before Buying a Multigenerational Home
