Purchasing a new primary residence and renting out your old one

[Yasser Rodriguez]

We are currently living in a primary residence that we closed on in May 2022 and moved into June 24th 2022.

Our primary home mortgage stipulates under occupancy clause: that we move into the house within 60 days of closing and occupy the residence for at least one year.

After that year, we were hoping on purchasing another primary residence closer to my

Job (30 miles away). We would love to rent out our current primary house as a long term rental.

Would we have to refinance if we fulfill that occupancy requirement? Also, in this scenario, could you quitclaim the property into an LLC?

Thoughts? Thank you - immensely grateful to the BP community.

[Chris McCormack]

Any time someone looks to employ this strategy I like to recommend a minor tax tip. Remember the IRS has a capital gain exclusion on the sale of your primary residence. To qualify, you have to live in the rental for 2 of the last 5 years. So if you plan on selling the house in the next 5 years you could benefit by staying in it for more than 1 year. You didn't mention anything about selling but always something to keep in mind.