Are there hoops to jump through when buying a house then renting it?

Question by NasaPasa: Are there hoops to jump through when buying a house then renting it?
I see people do it all the time, but I am wondering if it’s perfectly legal to buy a house, find a renter, buy a $ 50 online renting agreement, and rent the house. Is there anything else that you should do? I’m young, renting, but in a position to buy then rent. If it’s region specific, do you happen to know about Ohio by any chance?

Best answer:

Answer by Christin K
Of course it’s legal. That’s how houses come up for rent–someone buys them, then rents them. You can get a rental agreement in lots of places–and it probably won’t cost you $ 50. There is software available to make them. It’s legal everywhere–not in only certain places. An owner of a house does not have to live there–and may rent that house to anyone he finds suitable.

If you’re considering this, I would make sure of a couple of things first: (1) that the house is suitable for tenants–meaning, it’s up to code, and you have what a tenant needs there: i.e, parking washer/dryer hookups, sound plumbing and electrical, good roof, good windows. (2) that you SCREEN your tenants, including credit checks. Many a landlord gets himself/herself into trouble with tenants that end up being deadbeats, damaging property and skipping out on huge utility bills. (3) that you spell out SPECIFICALLY in any rental agreement what a tenant may and may NOT do–i.e., have pets (how many, which kinds), have other family members or roommates, sublet, where they should park and how many vehicles they will keep, and whether or not they can paint, carpet, decorate or otherwise modify your home. If you don’t want them nailing pictures up with nails–you need to SAY SO. If you don’t mind cats, but hate dogs, you need to tell them NO DOGS. If they have more than two vehicles, or want to store junk cars, you need to make sure they have these extra cars licensed and that any junk vehicles are removed. You need to make sure you have covered everything that could be a problem. (4) Set a fair price–and make sure they know exactly what utilities they have to pay–if your rent will cover trash pickup and water bills, this needs to be spelled out.

And remember–you will have to report any rental income on your taxes–but you will also be able to take deductions for rental EXPENSES and depreciation on the property. So don’t forget the taxes–get a good person who knows how to fill out the forms, or review them yourself so YOU know.

And finally, do some research on landlord/tenant law in Ohio. Know what you can and cannot do–(for instance, you cannot expect to come into their home without prior notice, and you cannot force someone to take care of maintenance or repairs they don’t have to–those ALSO need to be specified in your rental agreement. Ultimately, you will be responsible for the HOUSE–the condition, the code-specific things like electricity and plumbing, and leaks or damage from trees falling or rainstorms. The tenants are responsible for things they can control–cleaning, damage to the interior or exterior that they cause, pet damage, insect infestations, etc. (except termites–which you are responsible for.)

Do a quarterly inspection of the property–don’t just let the tenants live there without checking on them a few times each year. Make sure you KNOW what is going on in your property–because if they are doing anything criminal, (meth lab, dealing drugs) YOU may be responsible as well as them. There is a lot to consider in being a landlord–and you need to know what all those things are. Talk to other landlords–and listen to their “horror stories” and take heed. And get a lawyer to help you.

Good luck.

Answer by Ariaread
Yes it is legal since you apply for a Commercial Mortgage, put down 25 to 30% and purchase the proper building insurance.
What is not legal is applying for a primary residence mortgage and telling the insurance company you live there.

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