7 ms·
My favourite example of death related investment is the French housing system, viager. You can buy the rights to a house, but you only get the deeds once the cu
by joshvm 10y ago
My favourite example of death related investment is the French housing system, viager. You can buy the rights to a house, but you only get the deeds once the current owner dies. In return for paying the current (often elderly) owner a modest monthly rent plus a lump sum, you get the house for a low price (e.g. 50% off). The lump sum is a fraction of the discount price and the rent is, keeping it morbid, based on French life expectancy.
The fun part is you aren't allowed to ask explicitly how healthy the owner is, so it's a total gamble. You might be stuck paying rent to someone who lives until they're 100 or they could die in an "accident" tomorrow. So in addition to checking the walls for damp when you go round, buyers surreptitiously look for medication and disability aids. Presumably some people also go to the trouble of stalking the current owners to gauge how close they are to the coffin.
To make things more exciting, if your parents bought a house en viager and they leave it to you in their will (but the owner hasn't died yet), you're on the hook for the payments. If you don't keep them up, the owner can re-sell the house.
http://www.connexionfrance.com/explaining-the-viager-system-10211-news-article.html http://www.connexionfrance.com/explaining-the-viager-system-...
- Someone 10y agoIf you're unlucky, you end up with http://www.nytimes.com/1995/12/29/world/a-120-year-lease-on-life-outlasts-apartment-heir.html http://www.nytimes.com/1995/12/29/world/a-120-year-lease-on-... (1995): "Andre-Francois Raffray thought he had a great deal 30 years ago: He would pay a 90-year-old woman 2,500 francs (about $500) a month until she died, then move into her grand apartment in a town Vincent van Gogh once roamed. But this Christmas, Mr. Raffray died at age 77, having laid out the equivalent of more than $184,000 for an apartment he never got to live in. On the same day, Jeanne Calment, now listed in the Guinness Book of Records as the world's oldest person at 120, dined on foie gras, duck thighs, cheese and chocolate cake at her nursing home near the sought-after apartment in Arles, northwest of Marseilles in the south of France."
- hvm 10y agoSo she lived in a nursing home for 10 years but still didn't let the guy live in the apartment? I know she had the right to it but come on...
- tomp 10y agoIf she wanted to give someone money, wouldn't it be better to give it to the poor?!
- outside1234 10y agoHe has no rights to the house until she dies. This is perfectly within her contract with him.
- mathattack 10y agoSo she can get his payments, and money from a subletter? I guess it's part of the game.
- st3v3r 10y agoYes, it is. It's still also her being a douche.
- coldtea 10y agoContract rights have nothing to do with the morality of this...
- biot 10y agoThe morality is already clearly established: in exchange for a very small monthly sum, you get the property when the owner dies. The property may be a dedicated rental unit already, so whether or not the owner lives there has no bearing. So it's not just _within_ the contract, it's the _purpose_ of the contract.
- coldtea 10y ago>The morality is already clearly established: in exchange for a very small monthly sum, you get the property when the owner dies. That's, again, the contract. Seems some people can't tell between legal and moral, unless we talk about the 70s and segregation or something like that...
- gypsy_boots 10y agoI guess that is the risk for this approach. This could almost be the premise for an Edgar Allan Poe poem. It's almost too perfect
- teh_klev 10y agoHN discussion on that story from a wee while back: https://news.ycombinator.com/item?id=11367422 https://news.ycombinator.com/item?id=11367422
- carlob 10y agoThis exists in Italy as well, but it usually doesn't include a rent. You just buy the house at a discount. It's very very common in areas which are rapidly gentrifying.
- Pamar 10y agoWhat is the Italian name for this type of contract?
- gosub 10y agonuda proprietà
- Pamar 10y agoThat's what I supposed (I am Italian myself) but it looks different from the French thing. From what I understand with "nuda proprietà" you buy the apartment but cannot use it until the person in residence dies or voluntarily leaves. But you the owner will not pay anything to the "tenant". So there is no extra spending even if the person using the place lives much longer than expected.
- carlob 10y agoWell nuda proprietà is actually a bit more general a concept: it just means that one person has ownership and the other has all the other benefits. Remember when Berlusconi touted that as the solution to his conflict of interest?
- ahoy 10y agoDon't we just call this a reverse mortgage in the US?
- djloche 10y agofrom my understanding, reverse mortgage is a mortgage where the owners slowly encumber their property with debt. If the owners die (or decide to sell), the property is still the owners, but it has the mortgage debt on it so they have to pay that off as part of the process. these days, it is better to just move into a smaller flat and rent out the larger property at market rates.
- Fradow 10y agoBeing French, I never heard of someone doing this with strangers. On the other hand, it's a well known way to bypass succession fees : parents sell (or find a way to pass on without monetary exchange) the house in viager to their children, and continue living there until they die. That way, even in a case where there is disagreement in the family later on, parents can't be forced out of the house.
- pif 10y agoSame thing in Italy concerning succession. It exists as well with strangers, but I never heard a regular payment was involved: you just buy the so-called "nude property" and then wait.
- igravious 10y ago"bare property" :)
- kawera 10y agoIt's a low-profile business but transactions between strangers aren't as rare as one might think. Paris has a few notaires specialized in rente voyagère working in tandem with financial advisors. I know Toulouse and Aix also have those. It can be a great solution for an old homeowner with meager retirement earnings and no natural beneficiaries.
- ProfChronos 10y agoI thought you couldn't do it with members of your family, has it changed? Didn't have a look at it for a while...
- teekert 10y agoIt is also a very strong motive for murder. I wouldn't want to go into such a deal with a stranger who "wins" a very large sum of money when I die...
- maxerickson 10y agoStatistically, people overwhelmingly are not murderers. Even people with motive.
- teekert 10y agoBut such a thing would attract them. Like rich people attract kidnappers.
- Ntrails 10y agoGenerally people who kidnap believe they can get away with it by never being in the frame as it were. Given that you'd be one of the prime suspects on motive alone in this case, it seems like a bet on being able to commit a "perfect" murder. I don't think it's a likely occurrence
- sangnoir 10y agoIs there a faster way of becoming prime suspect? The kidnapping equivalent would be allowing random people to take out 'kidnap insurance' on you (with your agreement). If it so happens that you are kidnapped, it's pretty obvious which door the investigators will knock first.
- BurningFrog 10y agoBut this attracts the few who are.
- Idontreddit 10y agoActually it wouldn't be. You are buying an asset for 50% off which will continue to go up in price. And you get to pay a rentor a cheap rent to take care of your asset their entire lives. It's a great deal if you can get it. The only time this will get problematic is if housing prices drop and continue to drop.
- rogov 10y agoMy American university has bought property in this manner. There were several old houses on the fringes of the campus with elderly owners. The university bought the properties years ago, but the owners continued to live in them until they died. Once the property transferred, the university bulldozed the houses to build new research facilities.
- thomnottom 10y agoYou forgot to add "under mysterious circumstances".
- waqf 10y agoUsually in this situation the university becomes the landlord and the inhabitants are protected just under the usual tenancy and eviction laws.
- koliber 10y agoI believe it is called a reverse mortgage in the United States. https://en.wikipedia.org/wiki/Reverse_mortgage https://en.wikipedia.org/wiki/Reverse_mortgage
- mamurphy 10y agoIn the states, the bank is lending you money and essentially building equity in your home. If your heirs pay the loan off when you die, they often may keep the house. It's a no-lose proposition for the bank, presuming they charge a profitable interest rate. But, they are not guaranteed to get the house at the end of the deal. >Reverse mortgages allow elders to access the home equity they have built up in their homes now, and defer payment of the loan until they die, sell, or move out of the home. Because there are no required mortgage payments on a reverse mortgage, the interest is added to the loan balance each month. The rising loan balance can eventually grow to exceed the value of the home, particularly in times of declining home values or if the borrower continues to live in the home for many years. However, the borrower (or the borrower’s estate) is generally not required to repay any additional loan balance in excess of the value of the home https://en.wikipedia.org/wiki/Reverse_mortgage https://en.wikipedia.org/wiki/Reverse_mortgage
- lisper 10y agoIsrael Horovitz made a movie about it: https://en.wikipedia.org/wiki/My_Old_Lady_(film) https://en.wikipedia.org/wiki/My_Old_Lady_(film)