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> "There’s a lot of news about the big private equity funds buying up homes, but it’s actually the individuals who are driving most of it." I realize there are

> "There’s a lot of news about the big private equity funds buying up homes, but it’s actually the individuals who are driving most of it." I realize there are a lot of "house flipper" shows on reality TV, but I don't buy this. I'm not receiving 20-30 phone calls and texts per week from "individuals" wanting to buy my house. I'm getting those calls from sophisticated commercial operations, who mask their phone numbers to include the same area code and first three digits as my own, etc. Individuals aren't putting up "We buy houses! Guaranteed offer!" billboards every few hundred feet in my city. I don't think that banks will even give individuals an endless series of mortgages. You can't declare rental income as "income" to qualify for mortgage loans.

frankbreetz 5y ago
This is definitely wrong in my city. Everytime something reasonable comes up for sales it sells in a couple hours and is back on the market in couple months with some cheap renovations for a ridiculous amount. They buyer/seller is almost always listed as an individual and not a corporation.
curiousllama 5y ago
No, but they consider a mortgage on a rental property with a signed lease separately from a mortgage on a primary/secondary residence. They’ll def give an endless series of mortgages to an otherwise wealthy person who keeps paying them back by renting out the homes.
bognition 5y ago
> “You can't declare rental income as "income" to qualify for mortgage loans.” You absolutely can, it is income after all. All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio.
- ryanianian 5y ago
  > All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio. Not exactly. The underwriting process is very different for full-time residences versus investment/rental properties. Rates are usually higher, debt/income ratio must be lower, and appraisals and cashflow analyses include rental market considerations. Given this it's entirely reasonable to assume the rift between mortgage products for investment vs residence to widen. If congresspeople want to do something about perceived imbalance between residence and income real-estate, they could change federal subsidies or underwriting requirements for income properties making mortgages for income properties much more expensive and/or harder to get. (Just realized a peer comment said something similar.)
  - Kon-Peki 5y ago
    That's not what the article is saying. You buy a house as your full-time residence, live in it for a few years, and then buy another as your full-time residence. The previous one is rented out. As long as you wait a few years, the bank holding the loan on the previous house doesn't care. That original, owner-occupied rate is locked in for the life of the loan.
dmitrygr 5y ago
> You can't declare rental income as "income" to qualify for mortgage loans. You absolutely can. I did that. Bank was happy to consider money i make from renting out one of my houses as income when qualifying me for a mortgage for another.
OJFord 5y ago
Wow, where's that?
- StevePerkins 5y ago
  Atlanta. The Southeast is booming, and Atlanta in particular is turning into a tech hub. There may be less pressure in areas that are seeing net migration outflows, but I don't think the U.S. has enough housing to cover our population increases anywhere.
  - powvans 5y ago
    Can confirm. I live in Atlanta and am about to write letters like the one from the article to the owners of a couple dozen properties in my neighborhood that I’ve identified as suitable for my family. Just as discussed, I’m not planning to sell my current home. PSA: For anyone thinking of moving to Atlanta, don’t. It’s horrible here, go anywhere else. Save yourself from doom! /s
mooreds 5y ago
> You can't declare rental income as "income" to qualify for mortgage loans. Depends. If you have a signed lease, some lenders will take some portion of that into account when considering lending you money.
mcv 5y ago
I think there needs to be a strong fiscal disincentive against owning houses for investment. Houses need to be lived in, preferably by the owner. I'm all for a punitive tax on empty houses or houses with ridiculously high rent.
- tut-urut-utut 5y ago
  One step forward would be to just disallow any tax deductions for renting. Next step, increase taxes on rented or empty housing. In a few years, the market would settle with much more affordable prices for buying. But we still would have a problem that building new houses would stop to a halt due to low ROI, and renting market would heat again. For that, I'm not sure how to solve this.
  - pmorici 5y ago
    Wether a house is rented or owned by the person occupying it doesn’t effect the basic supply/ demand dynamics of the market. Punitive taxes on landlords isn’t going to cause housing prices to come down because the cause of high prices is a housing shortage. There is no indication supply is being artificially depressed by people letting houses sit unoccupied.
    - BizarroLand 5y ago
      There are more than 40,000 vacant homes in San Francisco, report says: https://www.sfgate.com/bayarea/article/how-many-vacant-homes-are-there-in-San-Francisco-16822916.php https://www.sfgate.com/bayarea/article/how-many-vacant-homes... Took me less than a minute to search this.
      - SaiUEF9U6gDXHyW 5y ago
        BizarroLand 5y ago
        [flagged]
ryathal 5y ago
You can absolutely use rental income as income, the main thing is you generally need 1-2 years of experience running rentals. You can even use theoretical income from renting out a new purchase in some cases.
jrs235 5y ago
>You can't declare rental income as "income" to qualify for mortgage loans. You can, but [typically] not until you have a solid history (a few years) of that rental income and it will be lender dependent. You also can't typically use future/potential income from a property to qualify for a mortgage for THAT property but you could for a business loan. That business loan will have a much higher interest rate and likely require you to put up other collateral or personal guarantee.

frankbreetz 5y ago

This is definitely wrong in my city. Everytime something reasonable comes up for sales it sells in a couple hours and is back on the market in couple months with some cheap renovations for a ridiculous amount. They buyer/seller is almost always listed as an individual and not a corporation.

curiousllama 5y ago

No, but they consider a mortgage on a rental property with a signed lease separately from a mortgage on a primary/secondary residence. They’ll def give an endless series of mortgages to an otherwise wealthy person who keeps paying them back by renting out the homes.

bognition 5y ago

> “You can't declare rental income as "income" to qualify for mortgage loans.” You absolutely can, it is income after all. All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio.

ryanianian 5y ago
> All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio. Not exactly. The underwriting process is very different for full-time residences versus investment/rental properties. Rates are usually higher, debt/income ratio must be lower, and appraisals and cashflow analyses include rental market considerations. Given this it's entirely reasonable to assume the rift between mortgage products for investment vs residence to widen. If congresspeople want to do something about perceived imbalance between residence and income real-estate, they could change federal subsidies or underwriting requirements for income properties making mortgages for income properties much more expensive and/or harder to get. (Just realized a peer comment said something similar.)
- Kon-Peki 5y ago
  That's not what the article is saying. You buy a house as your full-time residence, live in it for a few years, and then buy another as your full-time residence. The previous one is rented out. As long as you wait a few years, the bank holding the loan on the previous house doesn't care. That original, owner-occupied rate is locked in for the life of the loan.

dmitrygr 5y ago

> You can't declare rental income as "income" to qualify for mortgage loans. You absolutely can. I did that. Bank was happy to consider money i make from renting out one of my houses as income when qualifying me for a mortgage for another.

OJFord 5y ago

Wow, where's that?

StevePerkins 5y ago
Atlanta. The Southeast is booming, and Atlanta in particular is turning into a tech hub. There may be less pressure in areas that are seeing net migration outflows, but I don't think the U.S. has enough housing to cover our population increases anywhere.
- powvans 5y ago
  Can confirm. I live in Atlanta and am about to write letters like the one from the article to the owners of a couple dozen properties in my neighborhood that I’ve identified as suitable for my family. Just as discussed, I’m not planning to sell my current home. PSA: For anyone thinking of moving to Atlanta, don’t. It’s horrible here, go anywhere else. Save yourself from doom! /s

mooreds 5y ago

> You can't declare rental income as "income" to qualify for mortgage loans. Depends. If you have a signed lease, some lenders will take some portion of that into account when considering lending you money.

mcv 5y ago

I think there needs to be a strong fiscal disincentive against owning houses for investment. Houses need to be lived in, preferably by the owner. I'm all for a punitive tax on empty houses or houses with ridiculously high rent.

tut-urut-utut 5y ago
One step forward would be to just disallow any tax deductions for renting. Next step, increase taxes on rented or empty housing. In a few years, the market would settle with much more affordable prices for buying. But we still would have a problem that building new houses would stop to a halt due to low ROI, and renting market would heat again. For that, I'm not sure how to solve this.
- pmorici 5y ago
  Wether a house is rented or owned by the person occupying it doesn’t effect the basic supply/ demand dynamics of the market. Punitive taxes on landlords isn’t going to cause housing prices to come down because the cause of high prices is a housing shortage. There is no indication supply is being artificially depressed by people letting houses sit unoccupied.
  - BizarroLand 5y ago
    There are more than 40,000 vacant homes in San Francisco, report says: https://www.sfgate.com/bayarea/article/how-many-vacant-homes-are-there-in-San-Francisco-16822916.php https://www.sfgate.com/bayarea/article/how-many-vacant-homes... Took me less than a minute to search this.
    - SaiUEF9U6gDXHyW 5y ago
      - BizarroLand 5y ago
        [flagged]

ryathal 5y ago

You can absolutely use rental income as income, the main thing is you generally need 1-2 years of experience running rentals. You can even use theoretical income from renting out a new purchase in some cases.

jrs235 5y ago

>You can't declare rental income as "income" to qualify for mortgage loans. You can, but [typically] not until you have a solid history (a few years) of that rental income and it will be lender dependent. You also can't typically use future/potential income from a property to qualify for a mortgage for THAT property but you could for a business loan. That business loan will have a much higher interest rate and likely require you to put up other collateral or personal guarantee.