If you’re thinking about purchasing a property for investment purposes, you need to know about the primary residence rule in Tennessee.
In the state of Tennessee, to acquire a residence and claim it as your primary you must live in the home for a minimum of 12 months. After that period, you have the ability free and clear to move out and claim another home as a primary residence. You may ask yourself, what are the benefits of doing this and why would I put all of this debt in my name?
2 Key Reasons:
- When purchasing a primary residence, you have the ability to CHOOSE your down payment (3,5,10,15,20%.. whatever)
- When you are ready to move into a new primary and turn the past one into a rental, all you have to do is show an executed lease to your lender and they will count 75% of said lease as income not debt
This strategy can help you to purchase investment properties and rent them out, making a sizeable gross income while also owning an asset that is appreciating at a high rate of speed due to Nashville’s continued growth year over year. Win, win!
Have questions about real estate investments? Please reach out! We’re here to help and would love to chat.
Re-sharing this helpful information from our friends at House Haven Realty.