This is general education, not financial, tax or investment advice. Consult your own financial advisor and tax professional. Home values can go down as well as up.
Keep your house when fair market rent clears its full payment with room to spare, your rate can’t be replaced, and you qualify for both homes. Sell when the rent falls short or you don’t want to be a landlord. As of November 2026, Fannie Mae loans use market rent, not a lease: 75% of it can offset the old payment but never counts as income, and new landlords need six months of that payment in reserves.
Example terms: a $427,500 Conventional 30-year fixed loan (5% down on a $450,000 purchase) at 7.490% interest, 7.880% APR, is repaid in 360 monthly payments of $2,986.22 for principal and interest. Payments do not include taxes and insurance premiums, so the actual payment obligation will be greater. Monthly mortgage insurance is added until it is removed. Includes 0.026% in discount points ($111). Purchase of a $450,000 single-family primary residence in Chesterfield County, Virginia; 740 credit score; 30-day rate lock; debt-to-income under 43%. Loan amounts are base loans; where an upfront FHA premium or VA funding fee is financed, it is added on top and the payment is figured on the total. Payments are principal and interest only. Terms as of November 9, 2026. Other numbers on this page are illustrations, not offers. Any rate shown on this site is an example. Rates may change or may not be available at the time of loan commitment or lock-in. More example terms and APR.
Jump to a section
- Can I rent out my house and buy another?
- Should I sell or rent my house? The test I run
- Low-rate debt that may be worth keeping
- Will the rent cover the payment?
- Departing residence rental income: how lenders count it as of November 2026
- Qualifying to keep your house as a rental and buy another: a worked example
- Occupancy rules for your new primary residence
- Landlord basics before you hand over the keys
- Taxes go to a CPA
- When selling is the right call
You’re moving, and the house you’re leaving has a rate you’ll probably never see again. You don’t have to sell the house to be able to go buy another house. Here’s how I decide whether to keep your house as a rental and buy another, how lenders count the rent as of November 2026, and when selling is the smarter call.
Can I rent out my house and buy another?
Yes. Your current mortgage stays exactly as it is, and the house becomes a rental. You buy the next home as a primary residence you genuinely move into, and you qualify with both payments counted, using whatever credit your loan program gives for the old home’s rent. If the old house’s equity will fund the next down payment, open a line of credit on it while you still live there and state exactly what the money is for (how a HELOC down payment works). Repeat that every few years and it becomes my Blue Collar House Hack.
Should I sell or rent my house? The test I run
My first question: if you could reach your equity without selling, would you still sell? Then I run both sides. Six questions decide it:
- How cheap is your money? My rule of thumb: a fixed rate under about 5% is worth keeping, and under 4% is where selling gives up the most.
- Does fair market rent clear the full payment with room to spare?
- Can you qualify for both homes under your program’s rent rules?
- Can you hold reserves, the lender’s and your own?
- Do you want to be a landlord, or pay one? What would keep you up at night?
- What do taxes do? Ask a CPA before you decide.
Here’s one $400,000 house both ways, in round numbers: $210,000 owed at 3%, a full payment of about $1,400, and fair market rent of about $2,400.
| Compare | Sell now | Keep and rent |
|---|---|---|
| Cash today | $190,000 of equity, less selling costs | None; the equity stays in the house |
| Each month | Nothing | About $1,000 over the payment, before repairs and empty months |
| Loan paid down in five years | None | About $30,400, paid by the rent |
| Value growth in five years at an assumed 3% a year | None | About $63,700 |
| Your time and risk | None | Landlord work, vacancy, repairs |
Equity isn’t cash until you subtract selling costs, or you’ll think you have more money than you do. If the sale money would mostly sit in savings, keeping usually wins on numbers like these. If the rent won’t cover the payment, or a tenant’s midnight call would keep you up, selling wins, and that’s a fine answer.
Low-rate debt that may be worth keeping
A fixed rate in the 2s, 3s or low 4s is a rate that may not be available again for some time. You couldn’t buy a rental today with a 3% loan, and you already own one. In the example, the 3% loan with 25 years left costs about $996 a month in principal and interest; the same $210,000 borrowed new at an example rate of 6.5% would cost about $1,327. That’s roughly $330 more, every month.
Tyler’s take
Pay only the required payment on a low-rate mortgage, even when the rent runs higher. Rent follows the market. Your mortgage follows the rate in the terms of your note. They’re not connected, and that gap is what makes a cash cow.
Feeling stuck in a house you’ve outgrown because the rate is so good is what I call golden shackles. Renting it out takes them off and keeps the rate.
Will the rent cover the payment?
Price the rent off the market, not off your payment. My benchmark: what would a buyer pay each month to own your house with 20% down at current rates? That’s who your tenant is comparing you to.
Rent benchmark, $400,000 house in Chesterfield (example)
| Principal and interest, 20% down, example rate 6.5% | $2,023 | |
| + | Property tax at the 2026 Chesterfield rate of $0.89 per $100 | $297 |
| + | Homeowners insurance (example) | $125 |
| = | Rent benchmark | $2,445 |
No HOA here. Add yours if you have one.
Hypothetical and rounded. Check real comparable rentals before you set a price.
Your county’s rate is on my Richmond-area property tax page. Why 20%? Price rent off a 5%-down payment and it gets too high: your tenant would just go buy. Most renters can’t bring 20% down, so this is a benchmark, not the last word. List near the top of the range with professional photos, expect to settle a little lower, and budget the low end, which is why the example uses $2,400.
Judge it honestly: black is a win. Red isn’t automatically a loss: rent of $1,900 against a $2,000 payment that includes $300 of principal still leaves you about $200 a month ahead before appreciation. It’s not a loss until the red runs deeper than your principal. And repairs and empty months come out before anything counts as profit.
Departing residence rental income: how lenders count it as of November 2026
In lender language, the house you’re leaving is your departing residence. Rules differ by loan program, and a big one changed this fall. On a Fannie Mae loan, since September 2, 2026:
- No leases. They aren’t used for a departing residence at all.
- Market rent. It comes from an appraisal rent schedule (Form 1007) or rent comparison tools showing at least three comparable rentals.
- 75%, minus the full payment. The lender takes 75% of the monthly rent and subtracts the old home’s full payment, HOA included.
- Offset only. A positive result can only cancel the old home’s payment; it’s never added to your income. A negative result counts as a debt.
- Reserves for new landlords. With under 12 months of experience managing a rental, you need six months of the old home’s full payment in reserves, on top of other reserve rules.
Other programs, as of November 2026:
| Program | Is a lease used? | How the rent counts |
|---|---|---|
| Freddie Mac | Its guide has asked for a current, signed lease plus proof the rent is being paid; I confirm its current rules on your file | 75% of the rent minus the old payment; offset only, unless a borrower has a year of experience managing rentals |
| FHA | Yes: at least one year, plus proof of the deposit or first month’s rent | 75% of the lower of appraised market rent or lease rent, minus the payment; a positive result can add to income. Conditions include a move of more than 100 miles and 25% equity shown by an appraisal; ask for the current list |
| VA | If one is available; not always required | Rent may offset the old mortgage payment if the home won’t be hard to rent |
| USDA | Only for a home with 24 months of rental history, running at least 12 months after closing | None without 24 months of rental history, so you qualify with both payments. You can keep only one other home, and only if it no longer meets your needs |
Most conventional loans follow Fannie Mae’s rules or Freddie Mac’s, and the two have handled the lease differently, so find out which rules your loan follows before you rush a tenant into a lease. Under every program, the new home gets no rent credit: you live there.
Qualifying to keep your house as a rental and buy another: a worked example
Take a household earning $100,000 a year ($8,333 a month) with a $400 car payment, the old house above, and a $400,000 next home with 5% down. A $30,000 draw on a line covers the down payment and closing costs.
Step 1: the old house’s rent, Fannie Mae rules (example)
| Market rent | $2,400 | |
| × | Share the lender counts | 75% |
| − | Old house’s full payment | $1,400 |
| = | Net rent | $400 |
Positive, so the old payment drops out of your debts. The extra $400 is not added to your income.
Step 2: debt-to-income on the next home (example)
| New home’s full payment, with mortgage insurance | $2,991 | |
| + | Line of credit, interest only on $30,000 | $188 |
| + | Car payment | $400 |
| = | Monthly debts | $3,579 |
$3,579 divided by $8,333 of monthly income is about 43%. Count the old house’s $1,400 in full instead and it’s near 60%, past the 50% ceiling I work with on conventional loans.
Hypothetical: example rates of 6.5% and 7.5%, the 2026 Chesterfield tax rate, and mortgage insurance from a published rate card at a 740 score.
- My conventional ceiling 50%
$8,333 a month of income. A $400,000 next home with 5% down and a full payment of $2,991 with mortgage insurance, $188 a month interest only on a $30,000 draw from a line opened while you still lived in the old house, with the real purpose stated, and a $400 car payment. Fannie Mae rules: 75% of the $2,400 market rent minus the $1,400 payment cancels that payment and is never added to income. Example rates of 6.5% and 7.5%, the 2026 Chesterfield tax rate, and mortgage insurance from a published rate card at a 740 score. Hypothetical, not a quote.
See the numbers
| The old house's $1,400 payment | Debt-to-income |
|---|---|
| Rent offsets it | 43% |
| Counted in full | 60% |
As a first-time landlord, this household also needs six months of the old home’s full payment in reserves on a Fannie Mae loan: $8,400, on top of other reserve rules. Whether line money can count toward it depends on the program and the documentation, so I check it up front. New to the ratio? Here’s how lenders figure debt-to-income.
Occupancy rules for your new primary residence
At closing you sign that the new home will be your primary residence, and lenders check. My rule is at least 12 months in every home before it becomes a rental or you buy again. It has to be a real move for a real reason, like more room or a new job. Nearby can work, but expect the underwriter to ask why you’re moving, and the answer has to be real and documented. Plan to rent a house from the day you buy it and it’s an investment purchase, financed as one. We have to play by the rules: misstating occupancy is mortgage fraud. Military orders add wrinkles; see my page on PCS moves.
Landlord basics before you hand over the keys
- Screen every applicant the same way: written criteria, verified income and rental history, and fair housing rules followed to the letter. My worst tenant came from rushing to fill a vacancy while I was buying my next house. A deadline and prepaid rent are not verification.
- Call your insurance agent before move-in. A policy for a home you live in is not a landlord policy.
- Keep a cushion. My rule of thumb is about a year of each rental’s payments in reserve, much of it held as an open, unused line of credit rather than idle cash.
Taxes go to a CPA
I’m not a CPA. Rental income goes on your tax return, which your next lender will read, and turning a home into a rental changes the tax picture when you eventually sell it. Those rules come with clocks and deadlines. Talk to a CPA before the tenant moves in, and again before you list.
When selling is the right call
Sell when low stress is your household’s top value, when market rent can’t clear the old payment (plus the line’s interest, if you borrow against the house), or when neither of you wants to be a landlord and the numbers leave no room for a manager. If the risk isn’t for you, that’s okay. Sell the house and take the equity. You won.
Either way, decide with real numbers, not an app’s value estimate: rent tested, both loans run, taxes asked about, before the sign goes in the yard.
Questions people ask me about this
How long do I have to live in my house before I can rent it out and buy another?
My rule is at least 12 months, because at closing you signed that the home would be your primary residence. After that, you can rent it when you move. If a real change forces a move sooner, like a job transfer, document it and expect to explain it in writing; never hide it.
Do I need a tenant and a signed lease before I close on the next house?
It depends on the program. On a Fannie Mae loan, as of November 2026, the lender uses market rent from an appraisal rent schedule or comparable rentals instead of a lease. FHA loans ask for a lease and proof the rent is being paid, Freddie Mac’s rules have asked for the same, and I confirm the current rule on your file.
Do I have to report the rent on my application and my taxes?
Yes. Your application lists the rental and its payment, and once the rent is on your tax return, that’s where your next lender reads it. In my files, a rental that never shows up on the return gets counted as its full payment against you.
Can my HOA stop me from renting out my home?
It can limit it. Many associations ban short-term rentals and some restrict rentals in other ways, so read your HOA documents before you count on the rent. I’m not an attorney; if they’re unclear, have one read them.
Should I do a cash-out refinance on the old house before I move?
Not if your rate is low. A cash-out refinance replaces the whole loan at a new rate, giving up the cheap money that makes the rental work. A line of credit opened while you still live there leaves the first mortgage alone; here’s how the two compare.
Sources
- Fannie Mae Selling Guide B3-3.8-05, departing residence rental income
- HUD Handbook 4000.1 (Update 18), rental income from other real estate holdings
- 38 CFR 36.4340(f)(12), VA rental income from the veteran's existing property
- 7 CFR 3555.151(e), USDA eligibility of current homeowners
- Chesterfield County, real estate tax rate (FY27 adopted budget)
Examples on this page are hypothetical illustrations, rounded for teaching. They are not a quote or an offer to lend. Rates may change or may not be available at the time of loan commitment or lock-in. For example terms with the annual percentage rate (APR), see example terms and APR.