Secondary Home - Short Term Rental

[Clay Rikard]

If I buy a secondary home in the mountains or at the beach with a 10% down loan for a second home am I allowed to rent this property out on Airbnb or VRBO? I’ve seen some places say as long as you stay there 14 days or as long as you rent it out 180 days a year or less and I’ve seen some sources say that you cannot rent it out at all.

Also how you can buy a property with an FHA loan and then a year later rent it out without any issues, I was wondering if a secondary home mortgage was similar in that after a year it's fine to rent it out full time if I wanted to?

Please advise.

Thanks!

[Andrew Postell]

@Clay Rikard thanks for posting.  For a Fannie/Freddie type of loan (that's not the only loan type but that's the one with the best terms for a 2nd home) the rules are as follows for a 2nd home:

1. You must occupy the property "part" of the year - now "part" is not defined.  So really, you can occupy the property for 1 day and still satisfy the condition.  
2. You cannot rent the property for 12 months - if you did rent the property for 12 months....that means you would not be able to occupy the property for "part" of the year.  So it kind of makes sense.
3. You cannot give complete control of the property over to a management company like a timeshare or something like that - because then you might not be able to occupy the property for "part" of the year again.

So while there are some restrictions....there's not that many.  You can absolutely rent it out for part of the year.  That is totally allowed.

Now, for the FHA loan, you commit to living in the property for 12 months. And that's the general requirement for any "primary" home. So after you occupy it for 12 months, then you can go live in another primary home and rent out the other property. Now, getting a SECOND FHA loan is sometimes a challenge but you can certainly get a conventional loan instead.

Hope all of this makes sense.  Thanks!