My parents are currently in their early 70s, healthy and independent, living in a high cost of living area in a condo on the second level without elevator access. The stairs are not at all an issue for them at the moment but I suspect they will be when they become frail in the (hopefully) distant future. Their condo is worth about a million dollars, all paid for. I am currently interested in buying an investment property in another city that I would like to retire in, in about 15 years, not for cash flow but to get into the market now (vs at retirement. I currently own my primary home, which will be paid off in 15 yrs). My parents may be open to moving to this city as well— does it make sense for us to buy a house together where they will live (would pay cash using part of the proceeds of their condo and I can put in about $200k) with the vision that when I’m ready to retire in 15 years, we can expand the house or renovate it so that we can live together? In this scenario should we put both of our names in the title? We’d also be potentially interested in generating additional income through short-term rentals if we purchase a house that would allow for that. Wondering what tax/financial implications I should be thinking about— for my parents as well as for myself.
That also would include the current economy, and potential for rentals in the near and short term future.
I think that legal consultation would be mandatory, but the attorney should have experience in real estate investments, and tax laws applicable to income generating property, now and in the future as you and your parents age.
If your parents' condo is worth $1 million, I'm thinking they may never need Medicaid, but there are 2 people and I'm sure you haven't needed to research the cost of care, even in-home care. Many, many people who diligently and responsibly saved and budgeted are now on Medicaid -- something they never dreamed they would require for their care.
Other things to consider:
Who will be caring for your parents as they decline?
Will they be willing to downsize, simplify or move into a care community if they can no longer safely stay in their home and you (for whatever reasons) are not able/unwilling to care for them?
Do you want to be their primary hands-on caregiver?
Are you married/have a committed partner? Does this partner want to live with/in close proximity to your parents (not as they are now but as they become dependent)?
I just encourage you to read some of the posts by others on this forum who live with or near their parents and became "assumed" into the caregiving role. If you are single, this is a very strenuous responsibility. No one can ever imagine how even the best laid plans can fall apart -- or become an albatross -- all of a sudden when one parent develops dementia, the other has a stroke, etc.
In 15 years your parents will be 85 years old. IMO it is very likely they will have already developed some of the challenges of age and decline. One of the biggest challenges for adult children is when their normally reasonable parents slide into dementia and then become irrational and uncooperative. Again, please read some of the posts. Please don't crowd-source your tax answers from this forum since there are variables and nuances in your situation that will need to be considered by a professional in order to get your best guidance. You need a professional to help you develop a realistic and legally/financially solid plan. I wish you all the best as you plan for your own future!
The problem with co-mingled housing/money is that if either one of them ever needs Medicaid to pay for nursing home care, you've got a real issue on your hands.
I would consultvwith an estate/eldercare attorney (preferably a large firm with both specialties with actual expertise in your states' Medicaid regs) before leaping into this.