Using Your Current Residence as an Investment
Converting Your Primary Residence to a Rental Property
When purchasing a new or second home, many borrowers keep their current residence as a rental or investment property.
If you’re considering doing so, it’s important to consider the laws regulating property management. It may be beneficial to consider hiring a property management company. Ask yourself if you have the time and knowledge to treat your home as a business.
Typically, to use the rental income for qualifying purposes, you must have at least 75% loan-to-value (LTV) for FHA or 70% LTV for conventional loans in the new rental property as evidenced by an appraisal no older than 6 months. Many times you must have 6 months of house payments in savings.