Do you have a mortgage on your home? If so, you generally need to live in the home for at least 12 months before
converting it into a rental. Why? Certain perks are associated with buying a primary residence as opposed to
investment property.

You often get a lower interest rate and can put down less of a down payment when the mortgage loan is for your
primary home versus a vacation home or an investment property.

If you say you’ll live in the house but you really are buying it as investment property, you are committing mortgage
fraud. The penalty? Your lender could call in the loan immediately upon finding out. And that will probably lead to
foreclosure.

Read your loan paperwork or call your lender to find out the waiting rules that apply to your loan. After you’ve
lived in the home for the required time for your mortgage, you’re free to turn your primary residence to rental
property.

Find out whether you can get another mortgage

When you move from your primary home, you might want to buy another home to live in. If that’s the case, find out
whether you’ll qualify for another mortgage before you rent out your current home.

Your lender might consider the rental income you’ll get, but they might not. Either way, get the ball rolling by
talking with a mortgage lender before you make any moves.

Check with your homeowners association

If your home is in a neighborhood governed by an HOA, you need to find out whether there are any restrictions
regarding renting out your house. Some HOAs have no restrictions, some allow only a certain percentage or a certain
number of homes in the neighborhood to be rentals, and some ban the practice altogether.

Learn about tax changes

It’s best to consult a tax professional both for your rental property and for your primary residence. But you
shouldn’t be totally in the dark about taxes. Here’s what you need to know.

The bad news (regarding taxes) is that if you make money, that money is taxable income, so you should figure out how
that might change your tax rate.

But here’s some good news. Once you have rental property, you get to take these deductions for rental property
expenses:

  • Utilities
  • Homeowners association fees
  • Landlord insurance policy
  • Repairs you make to the house

  • Property taxes
  • ortgage interest

Ask your tax advisor or find out from your local municipality about the homestead exemption you probably have on your
current home. You are allowed to have that only on your primary residence, so find out what you need to do when you
wish to convert your home to a rental.

Ready your property

Look at the competition. Are the rental homes in your area upgraded? If they are and your home isn’t, you should
consider putting some money into your home to help ensure you’ll get renters and at market rate.

A new coat of neutral paint throughout the house and nice landscaping in front are good starts. You might want to
then make a list of all the improvements you’d like to make and get them done gradually. At the very least, make
sure your home is well-maintained and that everything is in working order.