I think he would out grow the razor cart in a hurry. Even a gas "yard kart" is gonna require some space for him to enjoy. A gas race kart is totally unsuitable for off road/yard stuff due to low ground clearance....you will have to find a track or vacant parking lot let him enjoy it. Wish I had known as I bought my nephew a used "Kid" kart a few years ago when he was 5. Disc brakes, 50cc Comer engine, slicks...a real race kart. He rode it twice and lost interest because my brother didn't take him to any asphalt and then his custodial mother move 300 miles away. New they go for about $1500-2K...I bought it slightly used for $1000 and sold it last year for $750 to a guy who started his kid in kart racing. They are perfect for 5-7 year olds. BUT they require taking the kids somewhere to truly enjoy it....not suitable for putting around yard. A used 50cc dirt bike like Tim suggests might be just the ticket for your parents/in laws place.
My brother now has a 5 y.o. dtr and bought her a 2 seater gas yard kart/dune buggy and she loves it....but they live on 120 acres.
Her's the kart style I'm talking about...this one is a similar one of the one I had...good price:
http://gokartsusa.com/topkarttonymargaycrg.aspx