Mortgage/renting/new home questions

[hurley842002]

When letting a potential renter look at the property, go outside and look through the windows of their car. If it's a mess, they will treat your rental the same way.

Yeah, okay.... You have kids? More often than not my place and my car is what most would consider a "mess", but I don't go out of my way to be destructive or disrespectful to the property, nor are we "unsanitary" or "filthy", yes there are toys all over the place.

Sorry OP, back on topic. I could be interested if we haven't found a decent place by then, as we postponed our home buying endeavor until the market settles. That is if you don't mind my 2 year olds toys all over the place from time to time.

[gnihcraes]

Yep, got kids. Difference of toys all over than filled with fast food bags and stuff. You know what I mean.

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[TheGrey]

Yeah, okay.... You have kids? More often than not my place and my car is what most would consider a "mess", but I don't go out of my way to be destructive or disrespectful to the property, nor are we "unsanitary" or "filthy", yes there are toys all over the place.

Sorry OP, back on topic. I could be interested if we haven't found a decent place by then, as we postponed our home buying endeavor until the market settles. That is if you don't mind my 2 year olds toys all over the place from time to time.

I don't know about anyone else, but I don't think of "car clutter" when considering this advice. I think of those cars that have cigarette burns, tears, and layers of evil-looking stains.

[sniper7]

Yeah, okay.... You have kids? More often than not my place and my car is what most would consider a "mess", but I don't go out of my way to be destructive or disrespectful to the property, nor are we "unsanitary" or "filthy", yes there are toys all over the place.

Sorry OP, back on topic. I could be interested if we haven't found a decent place by then, as we postponed our home buying endeavor until the market settles. That is if you don't mind my 2 year olds toys all over the place from time to time.

Toys are no problem, my 3 year old leaves me barefoot land mines all over the place. No wonder things went to plastic....it's better than a steel dump truck going through the side of your foot!
if it works out that way where we are renting it out, I'll post it up here first. Probably be next summer or a little later depending on if we are building a new home or finding one already done. I'll be ready to buy around March.

[sniper7]

I don't believe the Mortgage Insurance falls off of an FHA loan anymore. Depending on how long you've had your loan, it may or may not, so call and ask. I had to refinance my loan into a conventional to get it to come off.

If you do plan to refinance and use as a rental, are you going to refinance for the current value and use the equity to pay for the down on the new house? If so, make sure the rent you can get from the rental will cover the new mortgage amount.

I haven't thought about that, I guess it depends on if I can toss the equity at the new house, but then I'd have to use my down payment cash on the refi so I think I'd be better off to just refi the amount owed now. The rent would cover the refi at the current value with a little extra $$ to play with, but if I keep the current value of the loan and refi I would be much more comfortable when things break.

[Irving]

Personally, my advice is to think about this backward. START with an exit strategy. If this doesn't work out, what are you going to do? How many months can you go paying two mortgages if needed? If something unforseen happens and all of a sudden you can't get your house rented, how sick can you dump it and mitigate financial damage? That is where you start.

Don't take this as trying to scare you away, I'm not at all. If you start with figuring out a solid plan to exit a complete failure with as little damage as possible, everything else will come together better. Exit strategy first, then everything else.
Next is deciding what you want out of this rental. Of course you'll feel more comfortable streamlining your mortgage as it will give you a bigger safety net, but that also leaves money on the table. As I'm pretty fiscally timid, I'd probably do exactly what you are planning for the first year or two just to get my feet wet and feel everything out, with the plan to refinance to value in a few years and invest that equity else where.

Sorry if that sounds like jibberish, it's getting late.

[sniper7]

Makes perfect sense, I could have both mortgages covered and still pay the rest of the bills okay, it would just not leave me with much wiggle room at the end of the month for drunken eBay purchases or the like. Getting someone else to pay the mortgage on the rental would just be gravy, and I'd probably pay even more on principal each month just to knock down that mortgage faster and get it paid off.

[CO Hugh]

There are tax consequences to converting your house to a rental. Check with your accountant. I have managed properties before, and have a tight lease. PM me and we can discuss.

My partner used to say tenants are scum, and that is true. It can work you have to be tough. Leasing in the summer much better than winter.

[Dave_L]

PMI now stays on forever with FHA loans.

[sniper7]

There are tax consequences to converting your house to a rental. Check with your accountant. I have managed properties before, and have a tight lease. PM me and we can discuss.

My partner used to say tenants are scum, and that is true. It can work you have to be tough. Leasing in the summer much better than winter.

Okay I'll give you a shout when I get back or can PM, will be out of country the next few days