Considering Multi-Generational Living? Address These Issues First

Don't move in with your parents or kids without reading this.

Multi-generational living can have benefits for all parties involved. Older generations can enjoy the company of their children or other younger family members, can form close relationships with grandkids, can stave off the loneliness of old age, and can get help with their own needs as they get older. And younger generations may get financial assistance, help with childcare for their kids, and guidance from their parents or other older relatives.

But before buying a place and jumping into a multi-generational household, there are a few key issues you need to address -- including the following.

What kind of property will work for you?

There are different arrangements for multi-generational living. One option is a shared single family home. Another is a duplex or similar style of two-family home. A third option is a main house with an in-law apartment either separate or attached to the main property.

These different options come with differing cost structures and differing levels of privacy. You'll want to think about your home-buying budget and what would actually work best in terms of the lifestyle that you want.

How will the financials work?

One big benefit of multi-generational living is that it can be cheaper for members of both generations since you combine the financial power of both households. The older generation may have more money saved for a down payment, for example. And younger members of the family may have more money to devote to monthly mortgage payments.

Before you move forward, though, you'll want to understand exactly how the finances will work and make sure everyone is on the same page. WIll you split the mortgage payment? Will all of the parties be co-borrowers, or will one person be on the mortgage and collect rent from the others?

There are a number of different ways you could split up the costs, and you need to discuss all of the details. Think, too, about things like utility payments, home repairs, and furnishings -- especially if you'll all be sharing one connected space. You don't want to move in, find out you have very different expectations about cost sharing, and end up in money fights all the time because of it.

What will the rules and boundaries be?

Finally, you'll want to discuss what you think living together in a multi-generation household will look like. This can include addressing issues such as:

• Will you all be in shared spaces together, such as in the backyard of a duplex or the living room of a shared house?
• Will you do entertaining and most other activities together or will you maintain separate lives while sharing a household?
• What types of childcare support is expected? Grandparents may not want to be 24/7 on-call babysitters if they move in with their kids and grandkids, and that should be understood.
• What level of privacy will each family have? Will you have to check in with each other if someone will be home late or wants to go on vacation?

By addressing all of these issues upfront, you can avoid a lot of stress and make sure your shared living arrangements will really work well for all parties.