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Originally Posted by Rodney
Nosoup may be more up to date than this, but I checked into something like this a few years back, and if the premises are to be _primarily_ used as an income property -- even though you live there -- you may more easily be able to get a loan to purchase it than otherwise. Because the lender understands that your tenants will be making the payments for you, no matter what your other income.
The taxes are interesting, too. The fraction of the house you live in is counted as a residence, and your mortgage interest is tax deductible. The rest of the house counts as an income property, where every expense (mortgage, insurance, repairs, etc.) is balanced against income. _And_ you get to deduct depreciation as well.
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Keep in mind that I lend only in the state of Wisconsin, but...
Typically, it is far easier to obtain financing for an owner occupied property vs a rental property.
It is common for lenders to charge a higher interest rate if it is an income producing property.
As far as the taxes are concern, Bossnass is correct. You can write off the portion that applies to the are of the home that is considered owner occupied - the other portions can be written off against the income. A very big consideration is that you will be able to depreciate the property - which is a paper only loss, and depending on the price of the property can be significant. It offsets the income - potentially your personal income as well, so you will get a very large reduction in taxes owed.