Does rental property hinder you from moving into a bigger house?

Question

Hi BP members,

I am a newbie here but I have been listening to the BP podcasts for the past year. We are thinking to buy a long term rental property. We currently have a mortgage for our home and I am just wondering if we buy a rental property now with a conventional loan, will it be harder to obtain a bigger mortgage if we were to move into a bigger house down the road?

Thanks,

Jackie

Account Closed · Answer

Is it better to buy the rental under my name and collect the rent under LLC to show the income?

Account Closed · Answer

From my understanding, it will be hard to obtain a loan with a new LLC? And also the due on sale clause might cause some issue, although it is a small possibility.

Account Closed · Answer

Thank you Steve, I'll check with my lenders on that.

Matt Lentz · Answer

I have rental properties owed and operated under an llc. Google the pros and cons and see if it works for you. I like the llc because it separates the rentals and my personal finances.

Michael Noto · Answer

You gave gotten good information on this thread, in general it all comes down to your debt to income ratio so if your properties are cash flowing it should be less of an issue to qualify for loans on the personal side.

Bud Gaffney · Answer

@Jackie Tang no because your rental income will offset the debt. It’s all about your debt to income ratio

Jack Robinson · Answer

Hi Jackie. If you are worried about buying a personal property, I might suggest looking to put the rental into an LLC. This way your rental property is separate from your personal liabilities, and that can make buying a personal home easier.

Does rental property hinder you from moving into a bigger house?

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