Buying new home; Renting out old home

[Logan Ogg]

Hello BP,

I am looking to get started with RE soon. My wife and I are moving to Columbus , GA in the next couple months and are looking at homes to buy in hopes to live in for a year or so, then buy a new home and lease the old one to a tenant, or rent it in other ways ( airbnb, etc.) 

In my head I see this as a very passive way to get started, which isn’t how I’d like to start in my RE tenure, but with my new job requiring a lot of my time, I see this as our best option for now. 

Questions: Does anyone have experience with buying new homes, living in them as the primary residence for the x amount of time banks require, then buying a new home and renting/ leasing it out and continuing that process?
How long do you need landlord experience before you can count income from the old homes rented/leased toward my DTI ratio ?
What are some other things to consider when doing this kind of REI?

If this plan is plausible, I want to do this for a few years to dip my toes in the water with being a landlord before trying a new REI style like flipping/multi family homes, BRRRR, etc.

Thank you for your time! And if anyone is in Columbus and wants to meet up in the future, don’t hesitate to PM me 

[Devin Ryan]

Hi Logan, 

This is a smart and very common step to take here. As for your question, you do not need extended landlord experience before being able to count the income towards your DTI. If you make enough to carry both mortgage payments (current and proposed) to still qualify, you can absolutely do that and then secure the rental after closing. However, if you're planning to use the rental income as a means of keeping your DTI in the qualifying range, you will need to have a lease agreement in place for your lender in order for them to be able to utilize that rental income. Unfortunately, you cannot simply use the fair market rent in these situations and will need to have that level of documentation.