How To Turn Your Primary Home Into A Rental Property
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- čas přidán 24. 07. 2023
- Are you considering turning your home into a rental property?
In this video, I’m going to share all of my tips and lessons learned about turning your primary home into a rental property so that you can have the smoothest transition while maximizing your profits.
If you’re thinking of turning your home into a rental property, then download my FREE primary rental checklist. 🔗 goodsweethomes.ck.page/rental...
It’s completely free and it’ll help you navigate the process of turning your home into a rental!
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*Please note that the information in this video is for educational and entertainment purposes only and should not be taken as financial or investment advice. Any investments or financial decisions you make based on the information in this video are at your own risk. The links in the description above may include affiliate commissions or referrals, and I may receive compensation from partner websites. The information in this video is accurate as of the posting date but may not be accurate in the future.
What are your biggest challenges when it comes to turning your home into a rental?
Buying the home
Thank you for the informative video. I followed similar advice from others in the past and converted my primary into rental when I moved. Can we transfer the house onto a LLC to limit our liability when we convert into a rental? Will there be any issues with the existing mortgage company? Thanks for considering this question.
We are also planning to keep the current home as a rental property. This current home can split up 2 units since the basement is legal suite with a separate entrance. Now, i feel like falling in a dilemma when it comes to buying a second home where we move to because I am not sure which is better between buying an old house with a separate entrance that needs to be fully renovated and buying a new home with a separate entrance.
The other challenge is that we can't put 20% down to purchase a second home due to lack of cash, but 5% is okay. Good thing is we have a heloc account with 175k in it.
Whats your thought on this?
Our long term plan is to keep purchasing more home for investment just like you do.
@Flametamer777 yeah
💡 Elevate your financial game with real estate investment wisdom. Uncover success in every deal. 💼🔑
You left out some important steps, like if your mortgage company is ok with you moving out and changing it to rental use, and whether local and zoning laws allow for you to change it's classification and what paperwork and fees may be required, and depreciation, property taxes, recapture tax and on and on...
True, but most mortgages only require you to live in the property as your primary residence for 1 year. You can do whatever you want after that. If you own a single family home, you can usually do whatever you want, but if you own a condo in a strict HOA, they may limit the total amount of rented properties in the HOA, so you might need to wait until you can rent your unit out (which is one reason why I hate condos).
If you're in LA area you can rent out your walk in closets for 2000 a month and your broom closet for 800.
Lies, I can’t find a broom closet for anything less than $950
lol
So happy to come across your channel. Your content is so helpful.
Welcome to the channel! :)
I appreciate your videos man! Thanks a ton.
Thank you for watching! ☺️
*Amazing content. You are still the best! It's been a year since I found ways to improve my finances and by working with a recognized professional, I was able to achieve financial independence. I have to say this; “As long as you have determination and work hard, you can achieve anything you set your mind to.”*
Thank you for the knowledge !
My pleasure!
This actually helped answer a lot of questions I came looking for - so thank you. Also - My wife and I moved from the Bay Area to Texas as well! Hope you are enjoying it as much as we are.
One thing I didn't see covered, and may be in another video, would be how much to expect to charge in Rent? Is that something that a property manager would decide? Do you just go based on Market average? I feel like our home would price better since we have installed a hot tub and an outdoor kitchen, but at the same time I don't want to sky-rocket the price and scare away tenants. All the same - I have to turn a profit. How does one go about finding that price that's just right?
Great question! We typically use property managers to give us guidance on what a property should be rented for. If you have really nice amenities in the home, you could try to make your home a mid-term rental (30 day+ stays). It makes more money but you do have to deal with different personalities with every turn and sometimes the home can sit vacant for a few weeks (we're doing this with our Bay Area home). Best of luck!
Great call on changing insurance, thank you
My pleasure!
This was helpful. Thanks
You're welcome!
Glad I found you, subbed
Welcome to the channel! ☺️
Hey Sean love all your tips! I'm planning to move from CO to TX
Hey! Thanks! We are actually going to travel for a year and rented out our TX home. ☺️
This is very helpful. I own my townhome free and clear and I may need to relocate temporarily to finish my masters degree. My home is smack dab in the middle of Midtown Atlanta and it's very valuable. I've never rented anything out before so this is a brand new experience to me. Thank you so much for this information.
That’s what we did! Thank you for watching. ☺️
Since my home is homestead. Should I notify my local county to change the homestead exemption when I rent out my home? I am thinking of doing a midterm rental through Furnished Finders.
Yes, you should change that because you're not living there anymore. TBH I've been renting my old home in the Bay Area for 3 years now and have gotten 70% of my guests from Airbnb, 30% from VRBO and 0 from furnished finders. I think furnished finders is best for smaller places (like ADUs) than full houses, but that's just been my experience.
Do you recommend a good CPA? I live in San Antonio tx. If you can help me i would appreciate it
Hey Sean, I'm just starting in real estate and just got a great loan from some family I was wondering if there is a possibility of talking one on one about ways to start, setting up a business, and tax deductions I've watches most of your videos and they are very informative thank you so much
Hey! I have a coaching session. You may check the link on my bio. Thanks!
Perfect timing for this video to come out!
My family is about to start renting our house so we can move out of state while keeping our family lake home. But instead of long-term renting we'd do weeklong renting on Vrbo to maximize profits.
Appreciate you watching! Best of luck. ☺️
Are there any problems with turning my primary into a rental and then renting an apartment myself? Does it matter that I would own the rental property but not my primary residence?
There's no problem as long as you lived in your primary for at least 1 year. We actually do this when we move to a new place. This lets us keep our low interest rates on our properties!
Hey Sean! I found your videos on yt shorts and it roped me in to the idea of real estate, and passive income, im curious which you think is better to start with, a single property or something like a duplex or quadplex
Thanks for watching the videos! It really depends on what you prefer. Ideally, a multifamily property would be the best for cashflow purposes, but most people would prefer to buy a single family home for their own comfort. The best thing about personal finance is that it's personal!
These vids are so informative. Absolutely love ur content.
Thanks!
I would like for you to do a video on the stepping stone method of obtaining properties. Purchase your primary home, live in it for over a year, find new home, turn old home into investment property and so on. We are already planning to move to Tampa and was approved for our HELOC for the next purchase. What would you recommend we do and in which order? We already know we want to move to the Wesley Chapel area but what is next? do we need to live in Tampa before moving there? do we need to find jobs before applying for a mortgage in a different state? how do we proceed?
When you get an owner occupied loan, you're expected to live in the home as your primary residence for at least one year. After that, you're free to move, rent the house out, etc. The challenge you'll face is when you apply for your next loan because they'll look at your debt to income ratio and if you can't afford to get another mortgage, you may be limited in what properties you can buy next. Best of luck!
@@seanlovesrealestate That part we understand. Once we turn our primary home into the investment property and show proof of new tenant, DTI is no longer a threat. I am wondering if I should rent an apartment in Tampa first and then proceed with the process.
Any advice on doing AIRBNB for a townhome in SoCal. As you know short term technically not allowed in HOAs
Usually if you rent for 30+ days it's considered a long term rental instead of a STR. That being said, some HOAs restrict how many units can be rented out at one time so you'll still need to ask the board about that one. What some people do is get elected on the board of their HOA, then change the rules from the inside. Good luck!
Hi Sean, this what a very helpful video. I found the asset protection piece interesting. Do you have any plans to make a video on asset protection, LLCs and if there is ever a right time to keep properties under your personal name?
Thanks for watching! This video might be of help. czcams.com/video/X4WM-49W_iQ/video.html
I love ur videos ur so smart and you’ve taught me a lot a things
glad it's been helpful!
Hello Shan, can we have two houses as primary residence on single person? and submit form to city stating the house as rental for city tax purpose and second as primary ? Is this possible?
You can only have one "primary" home at a time for homestead tax purposes. But you can get a "primary" home loan once a year with a bank to get those low interest rates.
Loved the effort and thoroughness of this video including all the personal examples given the time format. Your a great example of spreading mindfulness about your finances and looking out for calculated investments. Just letting you know it’s appreciated
Thank you so much for appreciating. Means a lot! ☺️
How do you roll your home into an LLC ?
Reach out to a local title company or real estate attorney and they can do it for you for about $150 per property.
I love your vids thanks for teaching me how to realistate
Thanks for watching!
Good stuff, thank you!
Thanks for watching, Jordan!
Thank u! Can we rent our home out to a long term year long lease or more but leave it minimally furnished? Dining table, 2 beds, sofas? All furniture is less than 2 years old. We don't want to throw out our furniture or take it to our new apartment in New england
Yes, it's possible, but the new tenants might want to refurnish it. In that case, you might need to hire movers to store it in a storage facility.
I am living in Austin texas, i have house and mortgage on my name. I am planning to put this house under LLC ownership buy me. And rent it out.
And planning to move another new house in Austin and make that house as my primary residence.
Question is do I needed sign or consent from spouse?As texas is community state,
She is in another country
You'll need to call a title company for this question. I'm pretty sure my spouse had to sign something to put our properties under our entity, but I don't remember if this was notarized or not. If it is, she'll need to go to a US embassy to get it notarized.
Sean u rock!!! I want to do this! How do I rent this out BUT still buy a duplex? HELOC, I have equity on my house. Please 🙏 help!!
Thanks for watching! Speak with your lender to see what you can and can't do with your HELOC and if you qualify to purchase another duplex. Good luck!
What about professional tenants and California being a tenant-friendly state?
That's a great point! Professional tenants are really annoying and they can be a challenge to deal with especially in tenant-friendly states. Tbh, there's not much you can do once they're inside your property, so the best thing that you can do is to vet each tenant carefully before you allow them to stay in your home.
Do you have a video or tips how to vet tenants properly?
Hey! I don’t but I’m planning to do one in the future. ☺️
❤
I’m only 13 so I can’t do anything like this yet but what do you recommend me ???
That’s alright. Just keep on learning while you’re young.
@@seanlovesrealestate ok thanks
Same, I’m just planning ahead! 😂
Congrats you just won a subscribe/follower :p I talk with friend numbers of years ago about mess ideas of rent house. Friend suggest if house is 1,000 sq ft then rent house for $1,000 a month. If house is 400 sq ft then rent house for $400 a month. Is it good idea? or worst idea?
Thanks for subscribing to the channel! We don't price our homes exactly based on the square footage, but naturally, the large the house, the more we charge for rent.
Thanks for the tips!
Happy to help!
How is tax season for you in regards to owning homes in 2 different states? Do you have to pay the other state’s taxes on top of your current one’s for both houses?
Great question! You have to pay nonresident state income tax for the state in which your property resides. You include this income on your resident state income tax return but get a tax credit in your homestate so you don't pay twice on the taxes. I highly recommend working with a CPA once you have more rental properties. Hope this helps!
Sean, how often can you use Section 121 exclusion in your lifetime? Can you use it as many properties as you can as long as you live there more than 2 years ?
As far as I know, there is no limit to the amount of times that you can use the Section 121 exclusion. But if you do it more than once a year you'll probably raise some red flags.
@@seanlovesrealestate thank you.
No problem!
@@seanlovesrealestate Does this Section 121 exclusion rule apply even if you lived in home for more than 10 years continuosly?
Hi
hi!
@@seanlovesrealestate hello
How can I invest as a 11 year old?
Have your parents open a custodial account for you!
@@seanlovesrealestate ok I’ll ask them to do that I’ve learned about that in your videos
What do you commend? Self managing or asking a property manager?
Out of my whole portfolio, I only self-manage one of them. It takes away a huge burden and allows me to be more free!
Hi amazing video I have a question
Me and my family are in a tough situation financially and we want to rent out our home and live at our grandparents till we can afford to come back to the house our main problem is we can’t afford to move our furniture ( oven 3tvs 2 couches 2beds refrigerator and a dispenser) and my mom is a afraid that if we rent the house furnished it’ll get badly damaged or that the furniture and appliances may get stolen so is it a good idea to rent out our house?
Pls help
Pls help
Sorry to hear about your situation. It seems like you don't really have a choice since you can't afford to live in the home and you can't afford to move the furniture. Just rent it out as a furnished rental and if there's damage, then so be it. On Airbnb, you can file a claim and they'll pay you out if guests damage your furniture. Best of luck!
Lol
What about if you don’t move out of your property and live with roommates?
That’s househacking then! I did that before.
I live in Denmark, here you have the biggest chance, if it's not furnished,
Because people here want too decorate there own place, an not live In another's crapy furniture.
You pay pr month.
And can move when you want, the down payment is 3 times rental, plus first pay, after they move out they have to pay for 3 month, or until another person moves in
That's good to know! But I know that there's many people who enjoy being able to travel to another place for a few months and not have to worry about buying new furniture. On top of that, it's much more comfortable than staying in a small hotel.
Sir, i am a student. I am from Bangladesh. I have 50000taka or 500 bollar. I want to invest. Can you plz help me plz plz plz plz plz..... I want to invest for my haiyer study’s... Love yor video 🖤🖤🖤🖤
Thanks for asking, but I only put my money in things and people that I know. Best of luck!