Buying a second home and renting out the first home seems like a viable prospect. In theory, if you rented out the first home long enough, the tenant’s monthly rent would pay the mortgage over the long run.

Pittsfield, MA -- (SBWire) -- 08/30/2013 --It isn’t so easy for buying a second home and renting out the first buying a second home and renting out the first, but Real-Estate-Yogi.com can help you plan for two homes.

1. Financing the First Home
2. Financing the Second Home

Financing the First Home

The key to buying a second home and renting out the first is financing. If the mortgage is paid off on your first home, you likely won’t have any problems. If it is not, you will have to go over the terms of your mortgage. If you owe 80% or less on your mortgage, you can transfer over to a buy-to-let mortgage. 80% is the tipping point—most lenders are not prepared to give more than 80% of the value of the home.

Buy A Second Home And Rent The First With Any Type Of Credit At Affordable Monthly Installments

The buy-to let-mortgage should let you buy a second home and rent the first. Your lender will likely have your home professionally appraised to see what it’s worth, and what you could feasibly charge for rent. The rent you charge tenants must cover 125% of your monthly mortgage payments, as required by most lenders. If your home and property cannot meet these numbers, your loan will be turned down.

Financing the Second Home

Buying a second home is not as easy as letting your tenants gradually pay off your mortgage for you. Mortgages take many years to pay off, and mortgage lenders are very choosy about where they put their money. In fact, few lenders will ever loan you the full cost of your home. You will need to come up with 10-15% of the money upfront. This can be a challenge for many.

Once you are granted a second mortgage, it is important to stick to a budget. You are now responsible for two mortgages, despite the fact that tenants in your first home will be paying rent. It is your responsibility to collect the rent each month, and follow up if the money is not paid. Your mortgage depends on it.

Buying a second home and renting the first is a big investment. While it will pay for itself over many years, you will spend time and money for the upkeep of both homes. Even though your may be renting the first home to tenants, you will ultimately be responsible for updating the home and keeping it in working order.

About Real-Estate-Yogi.com
www.real-estate-yogi.com is a low cost website located in Pittsfield, Massachusetts that can help you buy a second home and rent out the first. In addition to our online database, which connects you to experts in the real estate field, you can also reach us 24/7 by phone at 1-800-987-1397. Our associates are standing by to take your questions, or help you schedule a free consultation.