I would like to turn my existing primary residence (townhouse) into a rental property. My plan is to take out a home equity loan on this property to use as a down payment for my new home. I am well below 80% LTV so that’s not a concern. The idea would be… close on the home equity loan… basically put the property up for rent next day. Is this a common thing people do? Any pitfalls I should be aware of? I’m also wondering would simply having the lease signed and receiving the 1st month’s rent be sufficient to constitute ‘rental income’ when I go to purchase my new home? The goal would be that when I go to purchase my new home the rental will be considered as part of my income, and they won’t have any issue with me using the home equity loan proceeds I just received as a down payment.
Edit: also, no restrictions for renting the property from the HOA