can i rent out my first house

[Tab B.]

hello. i have quick question. im looking for my first income house to buy and rent. i heard you have to live in the first house for 2 years before you rent it. is that true?. if yes where can i get some more details about it and is there any laws around it ;) ? thank you for any answers.

[Matt Devincenzo]

I think you're mixing two different time lines. 

The first is for loan qualification conventional lenders require two years of landlord experience to count the rental income in their determination. So if you have a high enough "normal" income to qualify for multiple loans this may not be an issue. For me it wasn't because I had owned a rental for about 5 years before I started buying a few more, so they always allow me to include my full income from rents.

The second has to do with the loan that you qualified for. If you buy a property as a non owner occupant (landlord) then there's no issue you can rent it out day one. If you buy as an owner occupant then almost all of the loans require a one year occupancy period and you sign documents that say you will do that. Not living there for that period would be mortgage fraud. 

The reason many (most) people starting out do the owner occupied turned rental route, is that owner occupied properties get better interest and down payment rates. A lot of people starting out are not doing so from a strong financial position and real estate is their way of changing that, so the better terms are what they need at that point. After they've done a few of those and have improved financially it isn't as big of an issue anymore.