renting out my house?
February 20, 2010 by
Filed under realestate rentals
Hello, here is my plan, looking for some info or some unforseen problems.
I just sold my house and used some of the profit as a 20% down payment on my new house. I plan to put the remaining profit into renovations and modernization of my new property and then rent it out. before i rent it out i plan to get a home equity line of credit on the new value of the home and use that line of credit for a down payment and renovations on a second home. once the second home is completed renovations i plan to once again get a home equity line of credit on the new value of the second home and put it towards a down payment and renovation of a third house and so on and so on for a 3rd and 4th ect….untill the property market in my area booms ( i am positive that it is coming ) and at that point sell all the properties i own at the height of the realestate boom. Before you answer please take into account that the rental price for the properties will be sufficent to pay for the mortage and pay off the line of credit i have borrowed against the house.
any comments, advice, concerns ect. would be appreciated
thanks
Current rental prices for most houses are usually well below mortgage prices.
Remember that many lenders are setting the max HELOC/H.E. loan at 75% of value and have a 10 year life on the loan. Not sure where the extra money is going to come from or what you are going to do if values haven’t advanced as much as you need them to in 9 years.
This plan is exactly what happened to many of the speculators during the housing crash. You are also going to be dealing with Capital Gains taxes.