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What happens if primary residence becomes investment property?

Hi, I live in Seattle and I am thinking about buying a condo, with it being listed as my primary residence, since it is my first property. The hitch is that I may be moving and I would like to be able to keep the condo and rent it out. Here are my questions:

Do I have to disclose this information to the condo board or to my realtor or to my bank?

Can I legally rent it after signing all of the documents and making the purchase official, or could the condo board itself install penalties against me?  

Would I need to pay a different property tax because I would be renting it out?
 
I read that there are higher interest rates for income properties, but since this is my first home it would not be considered an income property, am I correct?

Thanks for any information anyone can give me... I'm kinda confused here and in need of some guidance.
  • March 12 2013 - Seattle
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Answers (5)

Profile picture for nwhome.us
"Do I have to disclose this information to the condo board or to my realtor or to my bank?"

Yes, it is best if you are transparent and honest.

Rentals are unique to each HOA, or building.  You have to ask the question up front if you are anticipating renting the home out. The number of rentals that are currently allowed by the HOA will also affect your ability to get financing or the amount that you have to put down.
  • March 13 2013
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The answer to your question can be referred back to 1 governing entity:  Your parents.

Your parents:  You will have to revert back to the morals and values that they taught you.  If your intentions is to buy then rent.  You should classify the property as investment.  The point being that you do not own a home yet has no implication in the matter how to classify the occupancy of the property

If you true intentions are to buy, but then you have to relocate due to your employment (i.e., military); then these circumstances are outside of your control and a jury of 12 reasonable people would also see your point.

  • March 13 2013
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Profile picture for JoshBarnettREIB
You become a Landlord. 
  • March 13 2013
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Profile picture for wetdawgs
"I'm thinking about buying a condo"  and "I'm thinking about moving".

Two things to consider:

If you are thinking of renting shortly, then you will need to apply for an investment loan rather than a loan for a primary residence.

Most condo associations have limits to the number of units that can be rented.   Therefore, yes, you need to let them know and you may discover that you can't rent it.    
  • March 12 2013
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As long as you have owned it more than a year it is okay with your bank. The condo board, yes you would need to get approval from them if they have some type of stipulation for that.

If you secure a rental agreement for your current property we can use the rental income to qualify if you need that.

Yes there are higher interest rates for investment properties but your current loan would not change.  The new home would be considered your primary residence.  I can help you further if you contact me through my profile.
  • March 12 2013
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