House owned with sister - money problems

AthAnRi

In 2006 I bought a house with my sister.

Currently my sister lives in the house and I dont. So im paying rent and mortgage.

I really would like out of the situation but my hands are tied. I cannt sell as its not worth half what we paid.

Ideally i would like to rent out the two spare rooms and let my sister have the house but pay the remainder of the mortgage. Would add a little more stress on her financially but not as much as is on me at the moment.

Ideas welcome.

HeidiHeidi

What does your sister say about it?

Whatever innovative ideas or suggestions posters here come up with, your sister as co-owner is going to have to agree with them, so my first port of call would be her and trying to come to some agreement there.

Eldarion

AthAnRi wrote: »

In 2006 I bought a house with my sister.

Currently my sister lives in the house and I dont. So im paying rent and mortgage.

I really would like out of the situation but my hands are tied. I cannt sell as its not worth half what we paid.

Ideally i would like to rent out the two spare rooms and let my sister have the house but pay the remainder of the mortgage. Would add a little more stress on her financially but not as much as is on me at the moment.

Ideas welcome.

Rent out the two spare rooms under the rent-a-room scheme using your sister's status as an owner occupier to qualify. Continue to pay your respective halves of the mortgage using the income from the rent-a-rooms to supplement.

Alternatively, move back to the house you jointly bought thus removing your rent expenditure. You knew what you were getting yourself in for when you bought with your sister. This exact situation is why the very first response to any "Should I buy with my sibling" thread is "DON'T DO IT".

AthAnRi

HeidiHeidi wrote: »

What does your sister say about it?

Whatever innovative ideas or suggestions posters here come up with, your sister as co-owner is going to have to agree with them, so my first port of call would be her and trying to come to some agreement there.

Very true BUT i need some suggestions to bring to her first.

Michael D Not Higgins

AthAnRi wrote: »

Very true BUT i need some suggestions to bring to her first.

What other suggestions? There's half a mortgage to pay, it can be either you, your sister, or a lodger.

AthAnRi

Eldarion wrote: »

Rent out the two spare rooms under the rent-a-room scheme using your sister's status as an owner occupier to qualify. Continue to pay your respective halves of the mortgage using the income from the rent-a-rooms to supplement.

Alternatively, move back to the house you jointly bought thus removing your rent expenditure. You knew what you were getting yourself in for when you bought with your sister. This exact situation is why the very first response to any "Should I buy with my sibling" thread is "DON'T DO IT".

Hindsight is 20 20 Thanks for the helpful reply though. Rent a room seems to be the way to go.

Eldarion

AthAnRi wrote: »

Hindsight is 20 20 Thanks for the helpful reply though. Rent a room seems to be the way to go.

Nonsense. I was in a position to buy circa ~2007 as were many others who took a prudent look at the market, did their due diligence and came to the conclusion that the numbers made absolutely no sense.

You're already getting punished plenty enough for your bad decisions without me pointing it out but I just really despise that hindsight line. I'm screaming at people current day who are paying nonsense money for houses again in Dublin but they're just not listening.

Wait and see there will be another guy complaining about hindsight in 2018 for buying during the mini bubble in 2014/15.

iguana

Is your sister paying you rent? You should both be paying half the mortgage but she should also be paying you half the market rate rent as only she lives in the house.

cerastes

Eldarion wrote: »

Nonsense. I was in a position to buy circa ~2007 as were many others who took a prudent look at the market, did their due diligence and came to the conclusion that the numbers made absolutely no sense.

You're already getting punished plenty enough for your bad decisions without me pointing it out but I just really despise that hindsight line. I'm screaming at people current day who are paying nonsense money for houses again in Dublin but they're just not listening.

Wait and see there will be another guy complaining about hindsight in 2018 for buying during the mini bubble in 2014/15.

The reason people were jumping on was because of the fear induced hype, the real concern that if they didnt get on they may never get on the property ladder and have better security.
The thing is, they were probably right, rents were going through the roof and now again they are as with increses in the asking prices for sale, this doesnt justify the price increases asked for sale property, but its a real concern people see, only this time around as many cant get a mortgage.

iguana wrote: »

Is your sister paying you rent? You should both be paying half the mortgage but she should also be paying you half the market rate rent as only she lives in the house.

How so, she lives in her half, then she pays her half.
Then the OPs sister under the rent a room scheme lets the room to a lodger.
This money should be put towards the siblings (OP) share of the mortgage, the OP can top this up as required.

The thing is, when buying a property (I think its called in common??) as shared ownership, then there needs to be detailed agreements as to what each room is valued at in percentage terms of the overall costs, agreements about what happens if one owner doesnt reside there, seems like the kind of thing people wouldnt say is necessary or think makes a bigger deal of things but ti would show that there was an agreement to do things a certain way when trying to account for any possible future scenario.

iguana

cerastes wrote: »

How so, she lives in her half, then she pays her half.
Then the OPs sister under the rent a room scheme lets the room to a lodger.
This money should be put towards the siblings (OP) share of the mortgage, the OP can top this up as required.

But there doesn't appear to be any lodger so the sister has the whole house to herself. If this is because she doesn't want to share the house with someone, then she should be paying the OP half the market rate rent for the whole house.

MouseTail

iguana wrote: »

But there doesn't appear to be any lodger so the sister has the whole house to herself. If this is because she doesn't want to share the house with someone, then she should be paying the OP half the market rate rent for the whole house.

Of course the sister shouldn't be paying the mortgage and rent. There is no indication the sister doesn't want to share, and in fact, can't really put that condition on a jointly owned house.
The solution is very simple as outlined above, rent a room, and the OP makes up any shortfall.

cerastes

iguana wrote: »

But there doesn't appear to be any lodger so the sister has the whole house to herself. If this is because she doesn't want to share the house with someone, then she should be paying the OP half the market rate rent for the whole house.

If the sister doesnt want to have a lodger, but it would be being a bit difficult, but we dont know that for certain yet.
These things should be considered if buying in common, but as its likely they havent (in most cases), then the circumstances may decide what is needed to be done.
Is the OP likely to stay over at their house? on weekends/every week/month/only a few times a year/ever?
Whichever, and what the property is? ie is it a standard 3 bed?, then, the sister could get the choice of room they wish to live in, or work out the value of the OP's room and decide which to rent, but given they are residing there, really the choice should be theirs, the vacant room could be let to a lodger and contributed towards their share of the mortgage. If there is any surplus, it could be divided (not necessarily 50:50 and maybe even only a token value to the resident sister for managing the lodger) between the siblings to account for the sister having to live with another person they might not have planned on/managing the lodger situation, ie collecting money/splitting bills etc.
The OP could then have the smallest room (Box room?), to keep minimal stuff/have a bed/maintain access. If the OP is unlikely to stay at the house or they have access to a parental room/bed assuming the visits are minimal, or if the stays were very infrequent and there was a bed settee, but then the lodgers may wish to avail of the same. In the event visits are v minimal or not at all, then any remaining room (ie a box room) might even be rented and any rent from that either divided into cash immediately or contributed towards agreed specific things, such as future mortgage payments/or towards other ongoing maintenance costs, like carpet/flooring/heating repairs/other repairs etc as yet to be incurred/decided on, so long as one of the owners was resident in the property.

John_Rambo

Eldarion wrote: »

Wait and see there will be another guy complaining about hindsight in 2018 for buying during the mini bubble in 2014/15.

Did you snap up a few desirable properties to rent out or sell on when prices were rock bottom Eldarion?

OMD

Eldarion wrote: »

Nonsense. I was in a position to buy circa ~2007 as were many others who took a prudent look at the market, did their due diligence and came to the conclusion that the numbers made absolutely no sense.

You're already getting punished plenty enough for your bad decisions without me pointing it out but I just really despise that hindsight line. I'm screaming at people current day who are paying nonsense money for houses again in Dublin but they're just not listening.

Wait and see there will be another guy complaining about hindsight in 2018 for buying during the mini bubble in 2014/15.

In fairness his comments about hindsight were directed at you saying 8 years later that he shouldn't have bought with his sister it was nothing to do with a fall in house prices.

When you say you were in a position to buy in 2007 but didn't that was possibly the right decision. However, if you were in a position to buy in 2005 in Dublin and didn't then that was the wrong decision. Many areas in Dublin are back to 2005 levels plus if you took out a tracker in 2005, as most did, you would be paying 1% mortgage compared to 4% if you bought today. On top of that you would have been paying rent for last 9 years which would have cost more than the interest on the mortgage.

Like was said previously hindsight is 20/20 but I would feel awful to have been in a position to buy in 2005 and not have done so.

the_syco

AthAnRi wrote: »

Ideally i would like to rent out the two spare rooms and let my sister have the house but pay the remainder of the mortgage. Would add a little more stress on her financially but not as much as is on me at the moment.

Consider asking her to rent both the spare rooms out, and you get the rent from one room, she gets the rent from the other room. Not the best solution, but you'll get rent money towards your mortgage, and as she shall also get money, it might persuade her.

TimeToShine

She should be paying you half the market rate rent to live there. Probably the best option financially is for her to move out and for you both to rent the house out and split the rent. I doubt your sister will agree to having two lodgers move in to her home if I'm honest but it's worth a shot.

cerastes

TimeToShine wrote: »

She should be paying you half the market rate rent to live there. Probably the best option financially is for her to move out and for you both to rent the house out and split the rent. I doubt your sister will agree to having two lodgers move in to her home if I'm honest but it's worth a shot.

Unless you are having a laugh, No its not the best financial option, they will then be taxed on the lot, not to mention all the other stuff that goes along with renting, nothing suggest the sister wants to move out even, she is already paying her share of the mortgage.
Anyway why on earth would she pay rent too?? and why would she move out to rent when she already owns a share in a house, OP dont even consider suggesting this, its uninformed and plain ridiculous.
Besides, how do you know what the sister will want?

The OP should bring this all up with the sister, renting out their vacant room and contribute that to their share of the mortgage, if there is another room to rent out, then this could be rented and if so, any money from that split between the sibling owners, with a greater share to the resident owner as they have to live with lodgers and manage this.

The_Conductor

If its any way feasible at all- I'd suggest the OP move back in with his sister.
Outside of that- I'd look at how to transfer the ownership in its entirety to the sister- by whatever mechanism can be deployed- there is not going to be an equitable solution to this otherwise.......

How much would the property rent for- were it rented out in its entirety?

Would it be enough to cover both your mortgage payments- after payment of any taxes and other bills due? (Keep in mind rental income is taxable income- though you do have some allowable deductions- most notably 75% of the mortgage interest).

If the sister wants to continue living there- I would find out what the nominal rent for the property is- and split this in two. One half- the sister's half- is parked with the sister- the other half- is paid by the sister to the OP. If the sister wants to rent out a room or two- under the 10k rent-a-room ceiling- thats her business then..........

Its a mess though- and ultimately- one or the other of the parties will have to buy out the other.........

cerastes

The Op has thus far never suggested the sister wants to move out, so its a bit of a mess but the sister may not think so, especially if she is living in the house.
The Op needs to go to the sister and bring this all up, it seems they cant manage it financially so need some help.

The best way to do this would either be, move back or rent rooms as it involves no other outside influence over what you do or can do.

Selling, whether to the sister outright or to someone else will involve legal fees and may be flat out rejected by a bank if the sister cant be seen to manage on their own as it leaves the bank with one less person to rely upon the payments for. If the sister sells now also, she may not have anywhere to live re rental prices or ever get anywhere again, but I can see this could also just be a burden that the OP would like to get rid of so possibly they can move on financially.
It depends on a few factors, where the house is, is the OP living near, far or even abroad? Who does the sister live there with? if there is a boyfriend, then they should be paying some rent contribution, any children there? as that might limit the options re lodgers.

The easiest situation is bring this hardship up with the sister and say you need to start letting a room, but that you both could also rent any other spare room/s to that also and split that to put towards mortgage/bills/profit.

It's joint ownership so the mortgage should be split evenly, but Id see what the OPs room could be let for and contribute that to the mortgage, if it is their share nothing needs to be added, if it is less, then only a small amount, if its more then the OP and sister need to discuss how to divy this between them as the OP is at a loss to not live there and the sister is at a loss to live there with lodgers and have to manage that, so maybe 50:50.
If there are other rooms these might also be let which could be split, the benefit for the sister is that while the bills might go up from extra occupation, her share of each will likely go down as it might be split 2,3 or 4 ways. It might even be possible to have a backroom as the lodgers tv room and for her to still keep her own areas, such as living room, en suite as her private spaces.

Without the OPs further input its hard to say without hearing more information.

The_Conductor

The sister is most probably going to resist any reasonable approaches by the OP- because the current situation, as it stands, suits her down to the ground. She has a property that she only has to pay half the mortgage on- and has free run of the place.........

It hard to look at these things pragmatically- when a family member is involved- but that is what the OP has to do.........

The current status quo- favours his sister in its entirety. The OP needs an equitable solution- that is equally favourable to both parties.

That is:

• He moves back in to the property and lives there
• (or)She moves out of the property- and they let it as a whole
• (or)She allows the OP let rooms on the rent-a-room scheme- in lieu of rent from the sister for his portion of the property
• (or)They establish a market rent for the property- and she gives half this to the OP (from which he pays his part of the mortgage)
• (or)The put it up on the market and sell the sodding thing

The sister holds all the cards on this one- and if she doesn't agree to give on at least one of the above- the OP is up the creek without a paddle- and going legal is just about his only option- and who would want to go down that route with their own sister?

The current situation suits the sister down to the ground- and why wouldn't it?

cerastes

The_Conductor wrote: »

The sister is most probably going to resist any reasonable approaches by the OP- because the current situation, as it stands, suits her down to the ground. She has a property that she only has to pay half the mortgage on- and has free run of the place.........

It hard to look at these things pragmatically- when a family member is involved- but that is what the OP has to do.........

The current status quo- favours his sister in its entirety. The OP needs an equitable solution- that is equally favourable to both parties.

That is:

• He moves back in to the property and lives there
• (or)She moves out of the property- and they let it as a whole
• (or)She allows the OP let rooms on the rent-a-room scheme- in lieu of rent from the sister for his portion of the property
• (or)They establish a market rent for the property- and she gives half this to the OP (from which he pays his part of the mortgage)
• (or)The put it up on the market and sell the sodding thing

The sister holds all the cards on this one- and if she doesn't agree to give on at least one of the above- the OP is up the creek without a paddle- and going legal is just about his only option- and who would want to go down that route with their own sister?

The current situation suits the sister down to the ground- and why wouldn't it?

What kind of sensationalist tosh is this? How can you even suggest the sister would resist any reasonable approach by their sibling, it might be true but equally it might not be, no one knows, not even the OP as they dont seem to have approached the sister.
How can you even mention going a legal route? when the OP hasnt even brought it up with the sister, neither is it about who's holding what cards, it looks liek they bought a house jointly, it isnt the sisters fault the OP doesnt live there so they are in no way due to owe him/her rent, because he/she cant live there.
I think it would be very reasonable for the sister to have lodgers on the behalf of their sibling or on both there behalf's jointly.
But suggesting the sister moves out is ridiculous as the OP hadn't suggested the sister wants to do that.
On top of that, suggesting they rent out the property has the potential to put them both further into problems as there are a host of costs and concerns with renting that dont exist with letting a room to a lodger.

I'll follow the thread to see what other mad ridiculous suggestions people come up with, but mostly to see what the OP has to say about the posts, unless they reply cant see there is any point in giving any further advice.

Eldarion

John_Rambo wrote: »

Did you snap up a few desirable properties to rent out or sell on when prices were rock bottom Eldarion?

Yes, in 2012/13. Not in 2005 though as another poster suggested. I wasn't in the position to buy in 2005 unfortunately.