Hello, all! I am looking to buy a townhouse or condo in Dallas, Texas because I need to be there for the year and then am hoping to convert the property into a rental property once the year is up. But I am not sure where to Start!! What type of loans should I be looking into? And what exactly is the process after the year to convert into a rental? Any advice is welcome 🙏🏼
Talk to a lender, but most likely a conventional loan will be the best route. As far as converting to rental you will need to see what the hoa guidelines are on renting, some have more restrictions than others. Change to renter insurance, decide whether you will be the landlord or get a property manager. Best of luck these are just a few ideas to get you started.
First of all @lilly madrigal great Move about moving in Texas and it’s great place.
It’s good to start now because it’s process which take some time.(Financially)
Dallas has a lot of good spots to find good rental property. Feel free to reach out to me at [email protected]
I am realtor and have loan officer too.
We Will be make some good game plan to make whole process smooth.
@Lily Madrigal welcome to DFW! You'll find this market is awesome, especially for buy and hold, which sounds like your ultimate goal in the future. The type of loan you'll want really can be determined by looking at your situation, with that said, getting pre-approved is your first step. Make sure the lender understands investing and know where you see yourself in a few years, that can help guide them as well.
Hi Lily! Exciting news that you are looking to buy in Dallas! I'd be happy to talk with you about loan options (I'm a lender in Texas), and I personally have a long term rental property so I can answer questions you have about that process as well.
@Lily Madrigal . I personally do not recommend condos or townhomes as rentals because the HOAs vary and can make a rental turn cash flow negative very quickly. Of course you can search for properties with $X amount of HOA fees only and see what you find. You also don't know how much is in their sinking fund - cash calls can be expensive. Just things to consider.
Find out if there is an HOA and what the rules are and what their finances are like. Lucia is right, that they take up a good chunk of money and not all allow rentals.
I'd also look at homes. by the time you are done with condo/HOA fees, some homes (nothing with HOA) aren't that much more.
When looking, keep the rental value in mind. you want to make sure it will rent easily to good tenants and all of the expenses are covered by the rent.
Welcome to BP @Lily Madrigal ! As everyone has mentioned, talking to a lender will help answer that first question for you. And if you don't know of any, ask around on here for recommendations. Or get in touch with local Realtors and they can refer you to lenders as well. Townhomes and condos generally have more strict rules about renting it out, so clarify that info with the seller/HOA. A small SFH might also work for you
Thank you so much for all your recommendations! This is definitely super helpful !
Hi @Lily Madrigal , welcome to DFW! It's a great place to buy and when your team (agent and lender) know that renting it is your end goal, they can help you walk through the process with that in mind. Most agents have lenders and contractors that are reliable and visa versa. Find either a lender or an agent, and they can help you find the other piece and help you ask/answer all of the appropriate questions for your situation. Also, you will have several low down payment options since you are purchasing this as your primary home... what a great way to get started in investing!