Converting OOS 2nd Home to LTR

[Bradley Chapple]

The loophole of financing a property as a primary residence with very favorable terms, living there for a year, and then converting it into a rental has been discussed a lot.

I’m curious if it works similarly with a second home. With a second home, I know there are rules for STRs and how many days it can be rented out to avoid the tax consequences and so on, however, I’m not having much luck finding a clear, BS-free discussion about just converting a “vacation home” into a 100% long-term rental.

I have a lot of family out-of-state and I thought I might be able to kill a few birds with one stone if I were to buy a second home near family with 10% down and a low-ish interest rate, travel there a few times to visit the kinfolks (and performing some DIY rehab work each time), and then finding a tenant a year after the purchase date.

Obviously, I’m just trying to do the right thing and avoid committing mortgage fraud and having the loan called due, or having to refinance it as an investment property, which could be expensive considering we don’t know where rates are doing to be a year from now.

Anyone have any knowledge, experience, or just plain old opinions on doing this?