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I'm cross-posting this from the Tax Strategies board at the suggestion of someone over there. Here's the entire thread for reference

Here's the background:

DS is now living in RI on a shoestring budget with a couple of roommates. I am originally from there, and essentially my entire family is down there, so he can't throw a rock and not hit a relative.

DH and I have been looking for a potential retirement home, and we are not really sure where we want to be, but RI is definitely a possibility. DH is also a general contractor, and work is feast and famine for him, so he's been looking around up here in our area in MA for a potential house to flip, or just for something that could be our retirement home when we downsize, which we hope to do within the next few years now that the kids are out of college.

Putting all that together, I've started to wonder if it makes sense for us to buy a cheap property in RI, perhaps something that needs a lot of work, fix it up, and have DS live there. He would pay us rent, but he could also get a couple of roommates that could carry the bulk of the expenses, and he could potentially end up living there for less than he is paying for rent now. We could find something closer to where he works, and that would also cut his commute a bit.

I'm not sure how best to accomplish my goal.

Do we buy the house, rent to him, and have him get a couple of roommates who pay him rent? That way, he could end up paying less than an even portion for the rent, and would have a better place to live.

Should we consider buying the house jointly with him where we'd put up the down payment and we would all be on the mortgage? He could still get roommates to help with paying the mortgage, but I think he'd then get things like the mortgage deduction on one hand while declaring the rent as income on the other. If we did it like this, how would we structure the deal so that we'd get our downpayment money back later on when the house gets sold?

Other ideas to accomplish this? We have the money to be able to do this, but we do not plan to gift him the down payment money for the house. And he's got a twin sister, so at some point, we might do something similar for her.

We have multiple goals here - helping DS to get a good place to live that is affordable to him, getting our retirement home, and possibly picking up some investment property along the way. These are in rough priority order, but the real goal is to get him a better place to live. Anything beyond that is extra, and might just come into play in terms of choosing the house (i.e. I'd want at least one bedroom on the first floor if it were someplace that I'd end up living)

We have been landlords before for 16 years, so that part doesn't scare me at all, and it does seem like I can meet all our goals above without throwing any sort of monkey wrench into our longer-term plans.

DS does not know that we are thinking about this, so there are no expectations there. I'd rather know what I can or cannot do before getting his hopes up about this in case it doesn't pan out.

There's good discussion over on the Tax Strategies board, but I'm hoping to get more food for thought here in terms of how to potentially make this work.
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