Fire Insurance For Homes With Multi-generational Living Arrangements – Multigenerational living usually means at least two generations of adults, and sometimes their children, living on the same property. Photo: iStock
An increase in multigenerational living due to a growing population and worsening housing affordability are fueling demand for larger properties, as more buyers seek larger homes for extended families.
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And with social changes caused by the pandemic accelerating the trend, experts say the need for suitable homes is increasing.
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Multigenerational living — at least two generations of adults living in the same property — is commonly seen when aging parents move in with adult children.
“Older Australians are active later and they want independence for a long time. They don’t want to be separated from the community.”
Other forms of multigenerational living include live-in grandparents who assume childcare responsibilities in dual-income families and adult children who return to the family home after living independently, often to save money to buy their own home.
“Young people marry later, start careers later, and have children later,” he says. “They’re not creating their own family unit so it’s common to stay with parents for a long time.”
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Experts attribute the rise in multigenerational living to aging populations, declining housing affordability and delays in family formation. Photo: McGrath Stanhope Gardens
According to real estate agent Brett Heyman of Heyman Partners, most buyers of multigenerational homes look for properties with self-contained accommodation for elderly parents.
“We’re definitely seeing three generations—elderly parents, adult children, and their children—living together,” he says. “Aged care facilities are very expensive, and with what’s happening with Covid, some families want to be close to loved ones.”
Secondary residences, also known as granny flats, are a common way for homeowners to develop properties for multi-generational living.
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Construction costs typically range from around $120,000 for a one bedroom freestanding granny flat, to around $200,000 for two bedrooms.
Modern well-appointed granny flats look almost like normal houses, and there are also modular, flat-pack units that are built offsite, then assembled onsite in days.
Building regulations for secondary residences vary across Australia. In the ACT, secondary residences must have a gross floor space of at least 40 square meters and cannot be larger than 90 square metres. The lot must be at least 500 square meters.
In NSW, the minimum lot size is 450 square meters and the maximum dwelling size is 60 square metres.
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In Victoria and Queensland, rules vary by council, and in Melbourne, Brisbane or Adelaide, local rules may prevent owners from renting granny flats to anyone other than immediate family.
Different regulations in state and local government areas determine whether secondary housing can be built. Photo: Stone Real Estate
Secondary residences can be attached or freestanding, but each residence must have a separate entrance and private open space.
Although freestanding granny flats can offer more privacy, Hayman says most buyers of multigenerational homes prefer properties with all the living under one roof.
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“It depends on the family but generally speaking they like it to be an interconnected house with multiple living areas and separate bedrooms.”
“They want the kitchen to be the center of the home but want their own independent living space, ideally a separate self-contained flat.”
Many volume home builders now offer flexible dual living designs that conveniently include a secondary residence, for investors looking for rental income as well as families looking for space.
Granny flats and large houses are not the only options for multigenerational living. Dual occupancies, also known as duplexes, may be possible for property owners looking to develop their block, although minimum lot sizes apply. For some opportunistic families, buying a house next door is not out of the question, should it ever hit the market.
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McCrindle expects multigenerational living to become more prevalent in society, especially as dual-income family members of the Gen Z cohort are now accustomed to multigenerational living themselves.
“We have an emerging generation that loves and appreciates the influence of their elders,” he says. “We’re such a stratified society by age, that having the opportunity to actually bridge the generations is a precious thing.”
The information on this website is of general nature only and does not consider your objectives, financial situation or needs. Living arrangements in America today are a far cry from the “Ozzie and Harriet” nuclear families of the 1950s and ’60s. . 84 million Americans, 20% of the nation, now live in multigenerational households that include two or more adult generations or grandparents and grandchildren under the age of 25.
Multigenerational households are a great way for families or individuals to save money. Some Hispanic and Asian societies are traditionally characterized by two or three generations. Among households with Asian heritage, 29% lived in multigenerational households in 2016, according to Census data. Among Hispanics and African Americans, the shares in 2016 were 27% and 26%, respectively. Among whites, 16% live with multiple generations of family members.
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In recent years, the growing number of young millennials living with their parents temporarily or semi-permanently has fueled the growth of multigenerational households. A third of 25 to 29 year olds lived with their parents in 2016.
Saving money. Households with two or more adult generations are economically viable in many ways. When shared by multiple adults, the mortgage payment or rent per person is lower than if they lived separately. Other household expenses may also be shared, including utilities, food, maintenance costs, decorating costs, property taxes, homeowner’s insurance, and homeowner’s association fees. Expense sharing gives young adults the opportunity to build savings or pay off debt. Living with your family temporarily gives young adults time to reduce debt, improve their credit and save for a down payment.
Having multiple adults with financial assets and income increases the likelihood of getting approved for a purchase mortgage or refinance. You can also borrow more. However, lenders will use the lowest credit score when underwriting a mortgage. Before applying, make sure everyone’s credit is in good shape.
Help children keep in mind. Having extra adults in the home, especially grandparents, helps parents keep young children in mind. Grandparents help their parents survive divorce by giving their grandchildren undivided attention and helping single parents when they are overwhelmed.
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Strong family bonds. Family ties are strengthened when three generations live together. When grandparents are involved in their lives, children have fewer behavioral and emotional problems. Grandparents can be important in the lives of children with divorced parents. Living with their children and grandchildren relieves grandparents’ loneliness and enriches their daily lives.
Share in home equity. The longer you make mortgage payments, the more equity you get. Equity is the difference between the value of your home and what you owe the lender. You can access your equity by refinancing or selling. All family members making mortgage payments must have a written agreement with the borrower listed on the title and mortgage to share a pro rata amount of equity when the home is sold or refinanced.
Long life A recent NIH survival analysis found that healthy members of multigenerational families have lower rates of premature death and are likely to live longer. One reason for this may be because multigenerational households have more adults who provide emotional support to each other. Family support encourages a sense of well-being and stability for each individual.
Shared household chores. Dividing household chores between adults and older children can reduce burden and stress. For example, grandparents can pick up kids from school and babysit while parents are out. Parents can use their computer skills to pay bills and keep a family budget. Children can be responsible for cleaning themselves and helping with outdoor chores such as mowing the lawn, raking leaves, and shoveling snow.
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Participating in home interest deductions. If you are listed on the title as a co-owner and as a co-signer on the mortgage, and you and at least one other person pay interest on the mortgage for the home, you can deduct the amount. The interest you pay. See IRS Publication 936 (2018), Home Mortgage Interest Deduction, for more information.
Improved security. Grandparents feel safer living with the family, and their presence ensures that there are more burglaries in the house during the day.
Less privacy. When many people live together, they will have less personal space than if they lived separately. Grandparents and young adults who are used to living alone may find it difficult to be with others. The transition can be eased by allocating a private space for each person where they can retreat when needed and simple rules, such as knocking on the bedroom door before entering.
More noise. Adults who are used to being around children need some adjustment time. House rules may limit loud music depending on location and time.
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More homework. More people means more dishes to be washed, floors to be cleaned more often and larger laundry loads. House rules can include putting away toys, cooking and cleaning, which can mean more house cleaning and maintenance. Household chores can be rotated for tasks such as bathrooms, kitchens, and much-used family spaces.
Family stress. Living together can improve relationships between friends and family. There must be potential hostility
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