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If I have never been a landlord before, how hard is it? Assume I have 25% down and a low DTI (not borrowing more than 2X my annual income.) But no tenants lined up on closing day and never done it before.
After that, the rest depends on your individual qualifications.
I'm a former landlord. Here's some free advice. In addition to whatever money you have for a down payment, make sure you have at least $10k to $20k set aside for maintenance, repairs, and periods of vacancy. Your education will be quite costly until you get the hang of it.
After that, the rest depends on your individual qualifications.
I'm a former landlord. Here's some free advice. In addition to whatever money you have for a down payment, make sure you have at least $10k to $20k set aside for maintenance, repairs, and periods of vacancy. Your education will be quite costly until you get the hang of it.
Good points.
As far as property taxes they might be higher depending on where you are. Generally it’s the homestead exemption that makes a difference
Most important, do it by the book. A lot of failures are due to abandoning basics and letting emotions influence decisions.
If I have never been a landlord before, how hard is it? Assume I have 25% down and a low DTI (not borrowing more than 2X my annual income.) But no tenants lined up on closing day and never done it before.
It depends. You can go the conventional loan route which is Fannie Mae or Freddie Mac or you can go the Non QM route.
If you can qualify for the mortgage without rental income to offset it, you'll probably want to go Fannie/Freddie.
If you need the rental income to qualify, you can do a rent schedule on the appraisal and count 75% of the rent towards offsetting the mortgage payment.
As far being a landlord, there are a couple of different ways to handle that.
You can do it all yourself and save yourself 8-10% or you can hire a property management company.
As someone who has done both and is also in the real estate industry, I would go the management company route.
For single family home, it is very similar to buying your main sfh. For multi-family homes, there additional underwriting requirements that might disqualify the property from getting a mortgage.
Rental income does not count towards your income until after you have filed 2 years tax returns
Quote:
Originally Posted by ncole1
If I have never been a landlord before, how hard is it? Assume I have 25% down and a low DTI (not borrowing more than 2X my annual income.) But no tenants lined up on closing day and never done it before.
“Rental income does not count towards your income until after you have filed 2 years tax returns”
In the US this is certainly not true. That would only be the result of illegally claiming the home as a personal residence to avoid taxes. The rent minus certain deductions would be considered ordinary income. Consult the IRS code.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by luv4horses
“Rental income does not count towards your income until after you have filed 2 years tax returns”
In the US this is certainly not true. That would only be the result of illegally claiming the home as a personal residence to avoid taxes. The rent minus certain deductions would be considered ordinary income. Consult the IRS code.
While true, many lenders have time limits where the rental must be seasoned to be used to qualify as income.
If I have never been a landlord before, how hard is it? Assume I have 25% down and a low DTI (not borrowing more than 2X my annual income.) But no tenants lined up on closing day and never done it before.
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