I am new into all this, but have been doing some research lately as I am also looking to invest and hold. Thus don't take anything I say for granted. However I have a townhouse that I bought over a year, and it has been rented for 12 months now. That being said, I think if you have 12 month (or so) rental history, your bank will have easier time to count that rental income against your first mortgage. If your condo rent were higher than the mortgage, there would be a "washout" so to speak. If I am not mistaken, a bank would take approximately 75-80% (the rest is for maintenance and etc) of your rental income and count it towards your mortgage expenses, which will help your debt to income ratio. However, that is not the case. Your rent will be less, so I THINK from bank's perspective, your primary source of income (your salary) will have to cover the new mortgage, plus everything the condo rental income does not cover, plus 20-25% of your rental income (which are maintenance costs the bank will assume you will have while renting the condo).
Again, I am sure people here will correct me if I am wrong on this. :)
But to really answer your question, I don't think you MUST have 12 month rental history. Many people buy a primary residence and then decide to buy a larger home (upgrade) while keeping and renting their original home. In that case, I think all you need to show the bank is that you have a fully executed 1-2 (or more) years lease agreement locked in with a tenant, who has given you a non-refundable security deposit (1-2 month worth). Also plan to have 6 months worth of expenses put aside, to cover any vacancies. If you get all this, I think a bank should be able to consider your condo as a rental property.
If all above is correct, I agree with the rest of the folks. Stay in your condo, rent out a room (or two), and 18 months from now sign a long term lease so you can secure a loan for your next house. Hope that helps.
