Depending on what part of the country you live in, a $75,000 house would be very cheap. Around here, you wouldn't want to live in a neighborhood that cheap- it wouldn't be safe. Have you actually looked to see what comparable houses are going for? You haven't given any indication of your age, but things change. You really need to analyze what direction the neighborhood is headed- you don't want to have the most expensive house in a bad part of town! Our last house was in an area of retirees, but they began to be replaced by younger people who didn't take care of their houses. Now, only 15 years later, the neighborhood looks bad- really bad. I'm so glad we didn't stay and add on to the old house, which we had considered. I've heard that banks will no longer fully fund a build in a neighborhood that won't support the price, but I have no first-hand experience there. And don't forget, you have the cost of demolishing the old house, which has gotten a lot more expensive these days. I can't sit here and tell you what to do with a house that I've never seen, but I would be inclined to sell it and use the money towards something more promising.

flgargoyle,

Thanks for responding.

The town I'm talking about has a population of around 6,000 and is in a rural area. Most average homes for sale run between $75K on up (mostly around $100K to 200K depending on the neighborhood, age of house, size, etc). One of the local realtors, whose husband is a general contractor here, told me new construction runs anywhere from $75 per square foot up to $100 depending on the finishes, etc. In this area $200K is considered almost "mansionlike". In fact, I can remember the first time I saw a house around here listed for sale at that price. I was flabbergasted. It's not a neighborhood where crack houses are going to pop up (here the bigger problem is meth, which happens all over the place--even a few houses down from where we currently live). I guess what I'm saying is that crime isn't the reason I'm concerned, although your point about neighborhood decline is definitely something to think about.

I'm 44 and my wife is 42, so we have a few years before even thinking of retirement. But, we both would rather work around here (and did for a while). Opportunity around here is, like most places, lacking. However, one of the biggest selling points on the region is that is offers a nice, quiet, and in most cases, affordable place to live. The area where her lot is is a nice quiet neighborhood but most of the houses are older homes. To be honest, I haven't seen what most homes in that area would be worth, but part of that has to do with the fact that most people who have lived there a while have been there for several years, so they don't sell their homes. The younger people are renting there because in this part of the world costs aren't that high. You can rent a nice house here (unfurnished, mind you) for about $450 to $500 a month and some of those include water and sewer in the rent.

I guess my biggest question is, as it always seems to be, financial. I like the thought of having a lot already ours (empty lots in the few subdivisions around here go for anywhere from $6000 for a lot the size of the one we would have up to $24,000 for an acre but where we would have to have a septic system installed). This lot is about as "move-in ready" as it gets. But as you point out, I don't know how our local bank (which is locally owned, so it knows the area and us as well) would look at it. Of course, we will have to talk with them when the time comes, but now it's all speculation.

Your advice is well-received. Thanks.

Rob

This is not meant to be morbid, but aren't you counting the proverbial chickens? What if your FIL becomes disabled and needs to go into a nursing home? Under those circumstances, he would need to spend down his assets to qualify for Medicaid, and the house would have to be sold. This is just one scenario under which your wife would not inherit this house. Does she already own it while her father has a life interest?

While it's already in his will that the lot is hers, if that scenario happened, we would buy it ourselves. Plus, I can assure you that if he had to spend time in a nursing home, he will not need Medicare.

Rob

What I think I'd do is really look around the area and see where you would like to live if you didn't have the prospect of a lot that MAY be yours one day, and think about whether the main attraction is that you wouldn't have to pay for the land. You could wait a long time for this lot to become available to you, you may well be ready to build before that happens, and unless it's a neighborhood and lot that you would look at and buy if the possible inheritance were taken out of the equation....then look elsewhere. Find something you really like and buy it now (if possible) as it will almost certainly be pricier when you are ready to build. If your FIL's lot ever becomes yours, you can always sell it and use the money to help pay for the place you chose on its merits.

Remember I'm answering the question "what would you do?" and I'm basing my answer on your lukewarm list of pros for this lot and neighborhood. There don't seem to be many real pros for building the house you plan to live in for a long time, other than that the land is paid for and is flat. You may not need the reminder of the uncertainties life can hold, but it wouldn't be the first time an elderly person met someone at church or the bingo hall, married them and left them everything...or as someone else pointed out, your FIL could become disabled and the assets could be needed to pay for elder care. Those possibilities may not be at all applicable or possible to your situation....just thinking that it can be a good idea to figure them into the equation just in case. In any case, assuming your wife does eventually inherit the lot, as I said you could use the proceeds from the sale to help pay for a place you have chosen because you actively like it and where the house you hope to build fits in well. Just my thoughts!

I guess I need to clarify a point here. We already own a lot that we could build on if worst came to worst. I happen to like the other lot because it is flatter than what we own and bigger. Neither of us has any control over what my FIL does, but I know him well enough to know his two kids mean more to him than anything else. He's not going to screw them over.

briosafarm, I appreciate your feedback, and I understand you're only stating your opinion. All things being equal, I would still go for the lot that we didn't have to pay for. That's money I could put into other parts of the house. All I'm looking for in a location is proximity to shopping and peace and quiet, which this place has in spades. The only thing that concerns me is whether overbuilding for the neighborhood will hurt us in the long run. I know you can never say never, but I can't imagine a scenario where we would have to leave it, short of not being able to pay for it (which theoretically could happen, although I would never try to build something we couldn't afford). We both love the area where we live and I can't see going anywhere else. We both have good jobs that allow us to drive, but I'm beginning to hate the commute. As to the time we build, I have the rest of my life to wait. If it never works out, then so be it. As much as I would like to build, it's not the end all for me.

Again, thanks for your advice.

Rob

What are you actually asking for here? Your question was "So, given these same circumstances, what do you think you would do?" You've responded to each person who replied with comments that are along the lines of "well, that's your opinion" and "you don't know my situation." Well, of course not, you asked for our opinions. I'm a little confused.

If you like the land and it fits your needs, then use it to build sometime in the future (timing...undetermined). If you would prefer to be able to plan the build, including the timing of the build, then use something else. Either way, it doesn't sound as if you are planning on building in the near future so you have some (or a lot) of time to think about it...

No one will lend you money to build on a lot that isn't yours, unless you have something like an iron clad 99 year lease. The fact that your FIL's current will says it will go to your wife is not relevant. Wills can be and often are changed. Things happen. There is no guarantee that lot won't fall into someone else's hands.

You FIL will have to gift the property to you or make some other sort of arrangement that will satisfy a lender. Talk to your bank.

You should decide where (and if) you want to build and live independently of your FIL's property. The fact that your FIL is *someday* going to leave your wife a lot is a very, very, very minor consideration and it is distracting you.

Build your house on the best lot for you. Then when your FIL dies sell his lot and in your imagination subtract the proceeds from the cost of the house you built and have been enjoyng for years. Then you can pretend that you didn't have to pay for your lot!

Not only would I NOT plan on building on your FIL's property, I'd sell the lot you own, since you have no plans for it in the near future. Why pay RE tax on it? From your comments about the neighborhood, I don't think it qualifies as 'an investment'. Do you believe it will appreciate beyond what you could earn by investing the proceeds from selling it?

It seems to me you are premature in deciding what to do 10 years from now. But, it might be good to clear the decks of property concerns, leaving you free to PICK where you want to build/retire.

BTW, you NEVER want the most expensive house in a neighborhood, regardless of bank loan concerns. If you do want to live in FIL's neighborhood, would you build a house that fits in on the lot you own?

Medicare does not pay for nursing homes. Medicaid does. This is important. Medicare is an entitlement for everyone over a certain age. Medicaid is for the the poor. Many families sanguinely think that Medicare will pick up the tab if their relatives need to enter a nursing home. It won't. The families then find out that their relatives need to spend down all of their assets until they are poor enough to qualify for Medicaid. That means selling the house if there is one.

I don't mean to sound disrespectful, but so far most people are answering questions I didn't ask. All I asked was if you had a piece of property and building on it would make you have the most expensive house in the neighborhood, would you do it? That's all I'm asking.

Rob

Then why is the subject of your post, "Building on a lot that will eventually be ours"?

Even if I had titled the post "is the moon made of green cheese" I would expect people to read the original post and answer it. I think it would probably be better for all involved if I just withdraw the question.

Thanks
Rob

I bet you would have a hard time getting a lender to appraise your new build for what you would need. Especially in a neighborhood where it's acceptable to park a trailer across the street (home appraisal death sentence). You would have to have enough money to tear down and clear the old house plus build the new.

And, no way, would I have the most expensive house in the neighborhood.

Statements that seem [at first glance] to be off-track of OP, reflect that many different views are required before considering the sum total as a fair opinion.

But please consider that Chisue expressed my thoughts, especially that "you NEVER want the most expensive house in a neighborhood". Never.

And I feel just as negative about putting my house on someone else's land -- never. And unless your name is on the deed, it IS someone else's land, regardless of possible familial relationships.

Another thing that hasn't been mentioned as a possible con, there are numerous posts on here of people needing to move on because a property has too many memories attached to it. The death of your FIL is going to be a major turning point in your wife's life. She may be indifferent or pro now, but that could all change after his death. I think many of us would have a hard time knocking down our father's house of X+ yrs and building our dream home on the lot. I think most people would prefer to write their story on a clean slate. Your free lot comes with a lot of baggage.

Financially, how much is his lot worth, especially figuring in the cost of demo? His lot is less than a half acre, you maybe able to add a septic system for the costs of demo and tree removal. If land is ~24k an acre, that makes his lot worth about 10k. I wouldn't tailor my plans around this lot.