What does it mean to turn a primary residence into an investment property?

It generally means you keep your current home and rent it out (rather than selling) when you move into a new home. This approach may allow you to retain the existing mortgage terms while adding a rental property to your portfolio, depending on eligibility and loan guidelines.

Why do some homeowners keep their current home as a rental when buying a new one?

Some homeowners consider it to retain potential equity growth, potentially generate rental income to offset the mortgage, and maintain a favorable existing interest rate—while purchasing a new primary residence that better fits current needs.

Who can help me understand if this strategy fits my situation?

A licensed Castle & Cooke Mortgage loan officer can review your goals, current mortgage terms, and purchase plans to help you understand potential financing paths and documentation requirements for both the new home and a potential rental.

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Are you thinking about buying a new home, but worried about making a move because of today’s interest rates? If that’s the case, we recommend keeping your current home as investment property. Here’s why:

According to recent data from Bankrate, home sales declined by 15.4% compared to last year. As a result, you may be able to help meet the housing demand by renting out your current home!

By renting out your current home, you may be able to charge enough rent to cover that mortgage; and potentially even generate a little bit of cash flow! And not only would you be keeping the equity in that property, but you'd also be able to retain that low-interest rate as well. Now that’s a win-win!

You can then turn around and use the potential equity, plus potential rental income in your current home, to purchase a new home! This opens up a new home on the rental market, and puts you on the right track to build wealth through real estate!

As home prices continue to steadily rise, NOW is the time to purchase a new home and rent out your current one. If you're interested in learning more about this process, contact a Castle & Cooke Mortgage loan officer today to learn more!

Source: https://www.bankrate.com/real-estate/existing-home-sales/

The Benefits Of Turning Your Primary Residence Into An Investment Property

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