My OH's dad has recently moved in with his girlfriend, but still has a massive mortgage on his house and it currently isn't in a state where he can sell it. It's been a bit neglected as he hasn't been there much, and when OH's parents got divorced his dad was left with almost nothing, so where he'd started to do the house up, he didn't have the money to finish it.
OH and I currently live in a 1 bedroom rented flat. It's ok, but it's far too small, and we are currently trying for a baby so depending on how things go, we will have to move within the next year or so regardless. His dad has offered to rent out his 2 bedroom house to us. He doesn't want anything more then the mortgage for rent (which isnt much more then we're paying now for our rent), and we'd really like to help him out too as he's had a hard time of it. One thing that bothers me is the current state of the house. It's livable, but definitely not homely. There is a lot that needs doing, and we'd be more then happy to help out (both financially and actually helping redecorate etc), but in the current financial climate we don't want to spend out any more money then we have to. For example, when his dad went through a really rough patch (recently divorced and skint, working all hours of the day to pay bills) he couldn't even afford to pay his heating bill..the house got damp and mouldy, and while he's back on track now, its things like that which I wonder if they need to be looked into further, check that it's been managed properly for example.
The other thing we are unsure about (and we will look into it properly, I'm just looking for advice from people that have maybe done it before) is how it would work - I know we would have to get a proper agreement drawn up to cover both us and him, but what other costs are involved, for example, will he have to pay some kind of tax as he is receiving rent from us? Will he have to get a different type of insurance as he'd technically be our landlord? These might seem like obvious questions but we don't want to leave anything out for it to come back and bite us in the ass (for want of a better phrase!
) at a later date! The benefits of renting from his dad are definitely there - we can decorate how we want, we don't have to worry about paying a deposit and then worry about every tiny little mark (which I do now!), and we know he won't turn round one day and kick us out. It's not the best area, however its not the worst and once you're inside the house, who cares what its like outside. It could be a perfect family home for us until we've saved up enough for our own place, and by that time hopefully his dad will be in a position to sell his. He's even offered to leave his furniture there as he doesn't need it as his girlfriends place, so it's already furnished (everything we've got now was bought as space saving as our flat is so small, so we would just get rid of that when we got somewhere bigger anyway!)
So has anyone done this before, or knows about the procedures involved? We need to do some research into it and have a sit down with his dad and discuss it properly, but I know he's really keen and it could really help us out.
