Credit Scores, Spouse & Rental Properties...

[Account Closed]

So, eventually when we‘ve got all of my duck in a row, we plan on purchasing our first rental property (probably a single family home). My boyfriend and I are equally learning together and have decided that real estate investing is going to be our path to financial freedom. We both have great credit. We are not married (yet, hehe >:) Do we put the first house under one of our name & the second house under the other’s name? Should WE rent while renting our houses out to people? What happens to your credit after you purchase a rental property? Does it make a difference if you buy it as your property or as a rental? All info will be greatly appreciated, for I can’t find this information ANYWHERE. Not sure why.

[Heath Ryans]

@Account Closed If your going to do this before your married, (heck, even if you are by then) you better have some stellar agreements written up stating the ins and outs of who owns what and whose in control of it. Just like you were investing with anyone else. Draw up the contracts. Don't just assume everything will be fine between both parties. It will save you a lot of headaches and ruined relationships.

For your question about who to put on the deed, refer to the above. It doesn't really matter. However, after a certain number of mortgages in your names, most banks won't give you another. (5 maybe. I can't remember the exact number) So if you alternate your names on the deed, you will have an easier time getting loans approved.

Renting will reduce your upfront and overall spending, but you won't gain anything from paying it, whereas you would build equity in a home you owned. 

As for your credit score, It might drop a little after getting a hit from the report being pulled from a loan but having a real estate mortgage in your name is a component of your credit score which i would assume would raise it long term as long as you make payments on time. But there is no difference in what the property is for. Its still a mortgage.