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blahblah454 · 05-16-2010, 11:04 AM

I did a search on rental properties and was not able to find anything.

I am curious if any of you guys out there own houses for rental purposes, and how taxes and income and mortgages and all that fun stuff works.

Here is what I am thinking about:

My brother and his fiancée are moving to a city a few hours south of our home city. His lady is going to school at the university there, it is a five year course. They are having one hell of a time trying to find a place to rent and they suggested that I buy a place and rent it to them, after talking with my parents they think that this is a decent idea as well. It would be guaranteed renters for 5 years, assuming the relationship and schooling works out the entire time.

The houses there can be rented out for the same price as what they would in the city where we are from, but they cost 30% less to purchase. I would be buying one within walking distance to the university, so for future rentals I think this would be fairy easy to fill.

In about two years I will be looking to buy a house for myself in the city. Right now to avoid certain fees on the mortgage, a 20% down payment is required. This should be fairly easy on the first house, but the second house would be damn near impossible to come up with that kind of money in this short a time. So I don't know if I could take money out of the first place to use as a down payment for the second to avoid those fees.

Essentially I am wondering if you good folk know of any resources where I would be able to do some research on how taxes for rental properties work, and if the income is even taxed at all if it all goes towards the mortgage. Perhaps some good books or websites, or even personal experience.

I have always been interested in owning homes for rental purposes, and have wanted to find out more information. As what appears to be a common thread in my life these days, something I have been interested in doing but never get around to researching falls into my lap and I feel unprepared! That is where the collective knowledge of TFP comes in!

05-16-2010, 11:04 AM	#1 (permalink)
blahblah454 Let's put a smile on that face Location: On the road...	Buying Houses for Rental Properties I did a search on rental properties and was not able to find anything. I am curious if any of you guys out there own houses for rental purposes, and how taxes and income and mortgages and all that fun stuff works. Here is what I am thinking about: My brother and his fiancée are moving to a city a few hours south of our home city. His lady is going to school at the university there, it is a five year course. They are having one hell of a time trying to find a place to rent and they suggested that I buy a place and rent it to them, after talking with my parents they think that this is a decent idea as well. It would be guaranteed renters for 5 years, assuming the relationship and schooling works out the entire time. The houses there can be rented out for the same price as what they would in the city where we are from, but they cost 30% less to purchase. I would be buying one within walking distance to the university, so for future rentals I think this would be fairy easy to fill. In about two years I will be looking to buy a house for myself in the city. Right now to avoid certain fees on the mortgage, a 20% down payment is required. This should be fairly easy on the first house, but the second house would be damn near impossible to come up with that kind of money in this short a time. So I don't know if I could take money out of the first place to use as a down payment for the second to avoid those fees. Essentially I am wondering if you good folk know of any resources where I would be able to do some research on how taxes for rental properties work, and if the income is even taxed at all if it all goes towards the mortgage. Perhaps some good books or websites, or even personal experience. I have always been interested in owning homes for rental purposes, and have wanted to find out more information. As what appears to be a common thread in my life these days, something I have been interested in doing but never get around to researching falls into my lap and I feel unprepared! That is where the collective knowledge of TFP comes in!