Renting my Owner occupied home while i live in the In-Law

[Ernie Espinoza]

I just purchased my first single family 3 bedroom house that came with a non-permitted detached in-law unit in the back, typical for Oakland Ca. I am planning on living in the in-law unit since I got an owner occupied FHA loan. I am planning on living in this Oakland property for a year, then purchasing my second property as soon as I can. I am new to this so I have a few questions.

1. Are the repairs to the main house such as paint, carpet, HW floors deductible since I’m renting it?

2. Is the rental considered income…?

3. I do have home owners insurance, would I need to get an additional renters insurance…?

4. Is there anything else, good or bad that I need to be aware of in doing this? My loan officer said as long as I am living on the property which I am, I am not committing fraud. All utilities are in my name, just in case i need proof that i live on the property.

Thanks,

Ernie

[Ernie Espinoza]

My applications reads;

“I, the Borrower or Co-Borrower will occupy the property within 60 days of signing the security instrument, and intend to continue to occupy for at least one year;”

My Wells Fargo Mortgage consultant and I interpret living in the in-law unit as occupying the property. I’m hoping I am in the right here….. unless someone knows something different.

i do intend on claiming the rent as income and would want to add all my expenses i am doing to get the main house ready for rental. I do want to look for my second investment in one year, so i would like to show the extra income from rent on my taxes to help my with my DTI in a year.