Hello BP family,
I am on here today because I had a simple yet specific question related to renting out property. I am a COMPLETE newbie at REI, especially landlord-related. My scenario is as follows:
I am looking to take out a mortgage OR rent-to-own on a property somewhere in North Central MA, while at the same time looking to rent out the property to 2-3 individuals. Should I choose the mortgage, what [legal and otherwise] steps must be taken and papers must be signed and verified to add those individuals as legitimate tenants of the property which I will [eventually] own? Does the financial institution NEED to know about there potentially being tenants in the future, when it actually happens or at all (probably an obvious answer, though again, I am a newbie)? What is the whole set up between the banks and legal when there is a mortgage involved and I rent out?
On the other hand, what must I do should I rent-to-own the property while renting out the property myself?
Do you already own a home nearby? If not you may be able to purchase the home as a primary residence if you work close by. Technically you are supposed to tell the lender if it will be an investment property or not, but that is up to you. A primary residence requires less money down and will have a better interest rate. If the home is rented out there is nothing special the lender needs to know, they don't care about your leases or anything like that if you already own the home. Basically if you pay on time no one is going to bother you most of the time, unless it is a special housing program for primary residences.
No, I do not own any house at the moment. I was planning to purchase a home in the said area as my primary residence.
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