Can I pay mortgage with loan / credit until I find a renter?

6 Replies


I've found a rental property I'd love to buy, but the only problem is it doesn't have renters in it yet. 

Is it ok for me to use a loan or low-interest credit line of my own to pay the mortgage on the duplex before I get renters in it? Once the property has renters, the mortgage can easily by paid by the renters, with a little cash flow left over, with what the market value is for rents in the area for this size of duplex, etc. But is it ok to plan to possibly have to pay the mortgage with my own loan / credit until I find renters? Of course I'd hope I could find renters asap, but in case it takes time, is this strategy ok or unwise?  

Thank you!!

I don not understand what you are saying Of course its ok to pay a mortgage with whatever means you have The fact that you want to buy the property then you would either apply for a loan or use cash or buy subject to owner financing.Once you own the property you have to pay the loan no matter if you have renters or not  

@Eliza B. It is not an issue to borrow money to pay the loan, however, your mortgage broker may have an issue with you not have the necessary cash to cover any unexpected issues for a few months. 

How would you handle needing to replace a hot water tank, leaky roof, landscaping or something else?

You should plan to have enough savings to cover down time in rent and repairs.  If you dont have the basics, you are in for some tough times if the water heater breaks, or the heater goes out.  You really need some type of buffer, because things do come up.

Thank you, that's good advice. Yes, I don't have savings at the moment that I could use towards repairs, etc. so it would be better to save up some money to go towards possible repairs and to cover the mortgage before a renter is found, rather than planning to use my credit to pay the mortgage, etc. until I find a renter for the property. Thank you!

Save up more money in your reserves before buying a rental. You are setting yourself up for disaster if something in the house needs repairs or if you end up with a bad tenant whom does not pay the rent. You could lose a few months rent with evicting a tenant and finding a replacement tenant. If you already start off in debt from not being able to afford the mortgage payments before the first tenant is found and pays you are headed for disaster. Save up a reserve fund to afford the rental costs and rely on a credit card only for an unexpected emergency.

When you apply for the loan you're going to need to show cash reserves of six months PITI when you buy an investment property. If you already own investment properties, you have to show reserves for those, too.

If you're going to own a rental, it is essential that you have cash on hand for big expenses that have a way of popping up.   And tenants don't always pay their rent.  Depending on getting the rent each month to be able to cover the mortgage is a sure recipe for disaster.

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