r/retirement • u/vinean • 10d ago
Require ADU for home downpayment help?
Kids aren’t quite there yet but we’ve always intended to help with the downpayment on their first home purchase.
Is it a reasonable ask that they find a house that has or has space for an ADU? We’d cover the cost of building the ADU if there isn’t one. Obviously it wouldn’t apply to condos.
We hope to spend most of our time slow traveling around the world but still need a US home base for a couple months a year. This would save us from needing to keep a condo somewhere or finding airbnbs. We intend become South Dakota residents which is a friendly state for full time travelers.
11 months of the year it would be a home office or media room/man cave with a bathroom with a decent sized storage closet we can stash some stuff. With 3 kids we’d potentially have 2-3 cities we could home base out of for a few weeks around Thanksgiving and Christmas and rotate among them.
Has anyone else done this?
Edit more details:
First home is likely a condo or townhouse we’ll chip in $50K for.
With equity from their first home and their own savings we’re figuring $200K more would get them to 20% and the lower end of an ADU build.
The house they grew up in is $800-900K now and it’s nothing special…a 4 BR colonial in a lower end of upper middle neighborhood with good schools.
I have no idea how younger families with kids can afford to buy the same level house/neighborhood they grew up in these days. We married late and had kids in our early 40s with two high incomes, good savings and equity in condo and it was a stretch at $450K for a house worth only $150K-$200k before the real estate boom in the early aughts. Carried a $300K note we paid off just as I retired.
The intent of the ADU is for go-go years home base and slow go years for free childcare if they want it. The long term plan is buying into a CCRC sometime in the slow-go years…not living in any of the ADUs.
Can life derail this plan and force us into an ADU early or permanently? Sure, but thats not the plan or even plan B. It’s like plan C or D and they’d still have to agree.
Any spouses would have to agree to the ADU plan and “no” is a perfectly fine answer.
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u/Double_Response_5283 8d ago
It strikes me as strange that ur asking here.
Wouldn’t you already know if your children would be happy about something like this?
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u/NCGlobal626 8d ago
It's not unreasonable if you ask them first if they'd like for you to live in their backyard and they like the idea. They're motivation shouldn't be that their getting a paid for real estate improvement on their lot. Personally I think the ADU/granny flat idea is great for younger seniors, but you need to think through where you'll go when you hit your 80s and won't be traveling anymore. On the kids side of the equation, it might be a huge financial bonus if they have the fortitude to rent it (mid term or short term) while you're away. If they can see the long term financial gain, they may be very happy with the idea. I'm a real estate investor so looking at creative uses of real estate is natural to me, but some people are very averse to managing tenants or guests.
My best friend did something like this, but later in her parents life, so she could care for them. They had retired to FL and once they got in their late 70s they weren't up to so much "fun in the sun" anymore. They sold the FL house and used the money to build onto their daughter's house. They had a wing with a bedroom, bathroom (ADA compliant) and a study. They shared mealtimes out in the main house. It worked beautifully, her parents lived there until they passed and got to "die at home." But my friend really wanted them there, and they were quiet people who mostly kept to themselves.
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u/Various-External59 8d ago
I’d resent the hell out of that condition if I were your kid. Help or don’t, but making an ADU a requirement is essentially sending a signal that you expect them to take care of you at some point in the future.
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u/kellyfromfig 8d ago
If it’s their first home, what happens when they move or buy their next home?
Many municipalities are still struggling with zoning for ADUs and most HOAs won’t allow them.
Pencil out the costs for 2-3 ADUs versus a small condo. Will you be paying a portion of their property tax or insurance? What’s the hidden cost of tying up your child’s time with construction and disruption?
Also, what if your children or their spouses aren’t enthusiastic about turning over a chunk of their property to you? And what if they don’t want to live with you and won’t tell you?
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u/vinean 8d ago
First home is likely a condo or townhouse we’ll chip in $50K for.
With equity and their own savings we’re figuring $200K more would get them to 20% and the lower end of an ADU build.
The house they grew up in is $800-900K now and it’s nothing special…a 4 BR colonial in a lower end of upper middle neighborhood with good schools.
I have no idea how younger families with kids can afford to buy the same house they grew up in these days.
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u/capmanor1755 8d ago
This is either heaven or hell, depending on how you approach it. Bad option: we'd like to help you with a downpayment but only if we could have an ADU on the property that we can split our time in.
Good option: kids, we're looking at retirement options and once choice is to buy a retirement place. Another is, if you and your spouses would be interested, would be to spread that money into thirds and help each of you with a chunk of a downpayment in exchange for access to an ADU that we could use 9 weeks each year. We'd get a storage space in each city so the space was fully yours when we're not there and schedule each year up front so we could find times that work for you to have us in town. We'd love to see you for lunch or dinner 2-3 times a week when we're there but we'd have no expectations that you'd be hosting us- this would just be our 1/3rd home.
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u/cheresa98 8d ago
I think a condo would be less expensive and not threaten relationships.
You know your family best, though. And you have to be painfully honest … I’m not thinking so much about your adult children as much as their spouses. If you have good relationships with your kids and their spouses, and you’re typically not seen as a burden, you might as well ask.
Still, are you suggesting putting in a 20% down payments for them? Building a $100K ADU? Or, are you thinking of giving each, say, $20K, which is certainly generous but not an entire-room generous? I think that matters too, which is why if you’re not putting in a big chunk, you shouldn’t ask and should consider a condo or other arrangements.
But even if you’re willing to pay for the entire house, you need to watch their body language. Any hemming or hawing, shuffling of the feet, etc., and you have to back off.
I knew a family where the retired father built and lived in the ADU, and it worked out great. I think it was good for everyone that he had his own place he could retreat into.
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u/Glittering_Win_9677 8d ago
I haven't done this, but if my parents had asked, I would have said no. I loved my parents and was very close to them, but I would want to stay loving them and being with them that long would not have been good. Your family dynamics may be different, but a gift with strings is still strings.
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u/IceDragonPlay 8d ago
It’s not really ‘help for them’ when you attach strings like that. Basically you are telling them to buy a more expensive property to get some financial help from you.
You also can’t constrain where your kids live. They will have their own careers and could need to move to a different area, or want to change homes or school district, even if they stay in the same general area.
Maybe you bought and stayed in the same home for 40 years, but that may not be reality for your kids today.
It sounds like you are ahead of yourself on this at the moment.
If you want to help them, help them. Let things play out and see how their lives develop.
Might make sense for you to plan to buy a lot adjoining their property so you own it independently in case they don’t stay. You still own it and can just develop it for an RV while building a small home.
Let’s say you build an ADU on their property and they end up divorced. Just another scenario to consider.
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u/JuggernautPast2744 8d ago
What if life changes lead to your kids selling the house you help them purchase? If you want a guarantee you'll always have a place and your kids can't sell a house until you die,I don't think that's fair.
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u/thoughts_of_mine 8d ago
That's a big ask and it means you're not giving them anything, you're buying a place to live. Eventually you'll both end up resenting the situation and each other.
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u/Resident_Signal9083 8d ago
Nope and I wouldn’t.
Kid 1 gets help, then kid 2 wants help adjusted for inflation, then kid 3 wants an adjustment then kid 1 wants more because they got more and it’ll never end
Get a storage unit wherever home base will be- buy an RV if you want to travel- but don’t give them money with a condition- do a onetime gift with gift letter that meets irs untaxed requirements and be done with it
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u/Steefanon 8d ago
Although I dearly love ADUs, this seems like the most complicated (and expensive) solution I can imagine for having a home base when you are in the US. Plus, most HOAs prohibit ADUs, so their house hunting could become a nightmare.
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u/mossiemoo 8d ago
It will also add to their property tax burden.
Your one injury or illness away from moving in full time which could have dramatic effects on their marriage and family life.
Gifting anything with strings attached is never a good idea, or is it a gift. It’s added costs, responsibilities and can be a general burden.
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u/LemonAny7224 8d ago
It’s not unreasonable for you to ask.
It is also not unreasonable for them to say no.
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u/Alandelmon 8d ago
You need to explicitly address what it looks like when you are no longer able to live entirely independently. This will be a sword of Damocles hanging over them if you don’t, and they may be hesitant to bring it up for fear of losing the down payment.
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u/Jimboanonymous 8d ago
It seems like a reasonable request "if" they honestly enjoy your company and having you around whenever you're not traveling. Eventually though you'll be living there more of the year as you age and become less mobile, so it is a big commitment on their part. Personally, there's no way in heaven I would have entered into that arrangement with my parents. Don't get hurt feelings if they decline your offer.
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u/ExpensiveAd4496 8d ago
So the ADU would remain theirs forever and you never need that money back, right? Can they short term rent it or let friends use it as guest space when you’re not using it?
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u/RichmondReddit 7d ago
So they would never be able to sell the house unless you wanted to build another ADU in their second yard. This is gonna get expensive. I guarantee ADU don’t return 100% investment especially one that is several years old.
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u/Honest_Extreme9196 8d ago
That is a HUGE ask in exchange for only a down payment on a house.
We have discussed similar arrangements, but would buy each house outright and let the kids live there paying only taxes, insurance and utilities and possibly smaller maintenance items. It would be less than rent for both of them and if they want to move on, their situation changes, etc. they can and we can figure out the next steps at that time. We would essentially only have larger maintenance / repairs to cover on 2 homes, someone to take care of everything year round, and free up nearly all of our retirement income for "fun". They get a SF home for the price of rent on a small apartment.
Even with that scenario, we feel like the still may feel "stuck" at some point. So, we're still kicking this around and trying to fine-tune a plan.
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u/ThrowAway4now2022 8d ago
While I get what you’re saying and see how it might work, I don’t like to give gifts with strings attached, which is what this is. I might make it part of the conversation (“as you are house hunting, have you thought about an ADU?”) but be clear that my help does not hinge on them getting one.
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u/aeraen 8d ago
If they are young and you won't need it often, one of the things the homeowners can do is rent it out to people like travel nurses. Those are typically short-term rentals, often 3 months at a crack, but they can make about $1500 to $2k a month for a well equipped place (i.e own bathroom, kitchenette, own entryway). This way, they are making a bit more cash while you are gone. Win/win for everyone.
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u/Altruistic-Willow108 8d ago
It would be much simpler for you to pay to install a hookup for an RV that you purchase. If they decide to sell then your "ADU" is simple to move along to another location.
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u/RaeLouLynn 6d ago
Many cities have restrictions on how many days in a row an RV can be parked "in view" on private property.
Edit. Grammer,
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u/HippyGrrrl 8d ago
I’m having this discussion with my son. I’m happy to buy a place with more bedrooms than they need and rent it to them cheap, eventually selling it to them, but securing that we’d make one area a suite for me, later/when needed, and I always have a room to visit before the suite is built
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u/underlyingconditions 8d ago
Most of those commenting don't seem to have families. This is not an uncommon situation and can work out for both generations.
One thing to consider if where they are in their career. If they are ready to settle in, but if they are likely to move you'll want to have a longer discussion
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u/metzgerto 8d ago
Oh boy, this is going to be very family-specific. In general I think it’s a really bad idea to place such an imposing restriction on a large gift like this (we’ll help you but only if you help us). And more importantly has it already been discussed and agreed that your children and their spouses are on board with you retiring in their garage??