Occupancy and rental strategy

3 Replies

I see lots of questions about occupancy requirements but none that specifically address my question.

I am interested in building a portfolio of an investment rental properties. To do this, I would like to buy and occupied the first property for a minimum of 12 months. Then, purchase a new property and occupy it for a minimum of 12 months and rent out the former property. I would repeat this process of buying, occupying for the minimum 12 months and then renting until I had the desired number of rental properties. I believe I am fulfilling the legal requirements of occupancy but I thought I would ask to see if I'll run into any issues.

@Lee Majors legally I see no issues.  After a few years of this some lenders my see the pattern and be concerned . I doubt this will be an issue however as most lenders sell their loans. They are happy to earn a fee making you a new loan. 

The issue that is more likely to be a problem is your debt to income ratio. At some point they will say you have too much debt for the income you make.

@jehoha Lewis.

I'm kind of new to the rental scene (only have two rentals). What do you mean by adding or forcing value? This terminology is new to me.

How does the market effect the situation? My understanding is that the value of the property doesn't matter (intend to hold all properties for 30 years) as long as rents are covering expenses. And I haven't seen rents ever decrease in this area due to economic downturns. What am I missing?

Tkanks