sdrealtor, I'm also looking for one such property for my auntie/relatives to spend retirement times in San Diego. So far I've not seen anything close to fitting the bill.
The tax loss is a bunch of bull and I completely ignore it when assessing my options. If I get a tax advantage, I consider it compensation for my troubles in owning/managing the property. In my mind, I think of tax benefits and maintenance and improvement costs as a wash.
If you clients rent out the place to their son, they have to deal with depreciation, recapture etc… What a pain!
Oh, and in my mind, having the privacy of your own space is not the same as sharing it with roomates to help cover the mortgage. It's a quality of life issue. You only live once and, to me, physical comfort and enjoying quality food cannot be compromised.
