Order matters
If you're planning to buy both a rental and a home of your own, the order changes what you qualify for. Buying a rental first can use up debt ratio, add reserve requirements and end your first time buyer status for conventional programs, though Florida Housing's definition focuses on principal residences. Keeping your current home as a rental while buying the next one works well, but plan both purchases together. See conventional investment property loans.
How lenders count the old home
Which method applies? See projected rent vs Schedule E.
When you buy your next primary home and keep the current one, the old mortgage payment counts as a debt. Rent from it can help offset that, usually 75% of the new lease, with a signed lease and proof of the security deposit or first month's rent.
If you've never been a landlord
Lenders often want extra reserves, commonly several months of payments on the property you're converting, if you don't have a rental history. Plan for it.
Occupancy rules on the new home
The new home must genuinely be your primary residence, typically with the intent to live there for at least a year. Buying a "primary" you plan to rent soon is misrepresentation.
The house hack path
Live in a two to four unit property, rent the other units, then move out and keep the whole building as a rental. It's how I started with my fourplex in 2011. See conventional two to four units, FHA and VA.
Tax and insurance changes
When a home becomes a rental, your homestead exemption ends, your property taxes can rise, and you need a landlord insurance policy instead of a homeowner policy. Talk to your tax advisor about the tax side. See Florida homestead exemption.
Refinancing the old home later
Once it's a rental, refinancing uses investment property rules: lower cash out limits and investment pricing. If you might want cash from it, consider whether to refinance before you move out, while it's still your primary residence.
The accidental landlord
Megan and Josh outgrew their Winter Garden townhome but couldn't bear to sell. They signed a lease with a tenant, documented the deposit, and 75% of the rent counted toward their income. They bought a larger home as their primary and now own their first rental.
Frequently asked questions
Can I keep my house and buy another?
Yes, if your income supports both payments, with rent from the old home helping.
How much rent counts from my old home?
Usually 75% of the new lease, with the lease and deposit documented.
Do I need reserves if I've never been a landlord?
Often yes.
What happens to my homestead exemption?
It ends when the home is no longer your primary residence.