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How would I go about renting my house out?

Okay, so I'm only 22 years old, and my husband and I bought our home 2 years ago. Well, we are wanting to buy something a little newer and on a better side of town, so we have been making plans to sell our house and buy another one. Well, I started thinking about maybe renting the house out. I was just curious as to how I would go about doing that? Such as what are some laws I would need to know about, or do I need to have a permit to rent out my house? Also, do you think it would be a problem getting another mortgage for our new house with our old one still on our credit? Again, we are only 22 years old, but have EXCELLENT credit, but being young I know they might say we dont have enough history in order to obtain two mortgages.. What do you think I should do? Rent the house out, or just sell it and get my money back out of it? Also, I live in Houston Texas, and the house I currently own and live in was a foreclosure, so we got it for about $55k, and the houses in our neighborhood are going for $100k. So since the house wasnt that much, would if be a problem if we wanted a house for around $150k?

Public Comments

1. ok Beth you asked a lot of questions here. Yes the note may hinder your chances of moving up. The reason is only 75% of the rent will be used to off set the payment if you make it a rental. Plus you will have some vacant times and up keep from time to time as it is still your home. You will Have 50k in equity to put down if you do sell and thus the new home will have less mortgage and less payment as well. You are very young to jump into being a landlord and all the problems that can cause. My personal suggestion is to sell it and move up at the same time with any offers you make on a new one with the contingency that yours closes a t or about the same time I am a mortgage banker in TN & KY
2. You need to get some info from the gov't about the laws pertaining to rental properties...so that you know what a lease can and cannot say, what your rights and responsibilities are, etc. You need to study up in advance. It's tricky stuff. As for the banks, you already have one mortgage on the go so that could count against you, BUT with your first home being rented out, presumably the rent will cover the monthly expenses of the home. Be sure to calculate in your cost of grounds maintenance or interior repairs (depending on what you are responsible for) and taxes. Don't short yourselves. Take those numbers and add 20% just in case. If the rental home can cover it's own bills, that essentially frees up your personal income, because as long as you keep the place rented, you will have no expenses to carry. Depending on the price you negotiate for your new home, you could do quite nicely, but always remember that the rental could come back to bite you on the butt. You HAVE TO keep it rented and pray that you have good tenants who will consistently pay their rent on time. If the bank gives you trouble, consider selling. If you got the house for 55K, you could probably put some lipstick and mascara on it, and double that on resale. It would make your mortgage on your new place a joke. Good Luck.