Greetings! I hope you had a wonderful Thanksgiving. 

One benefit of owning your home is having the ability to rent it out, whether that is your intent from the beginning as investment property, or when you move out and wish to keep it as a rental. That may be simply as an investment at that time, or you are "underwater" on the mortgage, as happened to a lot of folks 2008-2012, or you want to build more equity before selling. There are several layers of restrictions that come into play on this decision, so please take the time to know your rights. 

** Your Homeowners Association (HOA) may limit or disallow your ability to rent either short term or at all. Many condo and villa developments have this spelled out in their rules and regs, called bylaws or indentures. It is rare for a single family subdivision to restrict it, but I am sure it is out there. When you are purchasing a home, you can make the sale subject to your review of these documents and a right to back out, but make sure your Realtor includes this protection in the offer. 

** Municipalities are becoming more active in prohibiting or limiting short term rentals, usually defined as 30 days or less. This is targeted at the Airbnb industry which allows individuals to advertise for rent as little as one night, either part or all of their home. St Louis City allows it with a code inspection - occupancy permit process. Maplewood allows it but requires the owner to spend the night on-site and post their contact information in case of problems, while also applying for a business license and occupancy permit. Chesterfield, Hazelwood, Ladue and others have passed laws this year prohibiting any home rentals for less than 30 days. Most municipalities require code inspections and occupancy permits for home rentals of any length, even when they are not required for sales. Check with your local government as the short term rental ability is changing rapidly. 

** On a normal home loan, your lender will require you to move in and occupy the property as your primary residence within 60 days or as provided on the mortgage documents. The loan typically allows you to rent it out after you have occupied it for a certain amount of time, ask your lender on this. If you are going to rent the home right after purchase, you need to get a loan for "non-owner occupied". It will require a higher down payment and higher interest rate. 

** Your insurance carrier will designate a different type of policy once it becomes a rental. It is generally a little less cost, as you are not insuring your own personal property, but still covering the structure and liability. The tenant should have a policy too. 

** There are taxation policies regarding rental income, what expenses you can deduct, and capital gains when you sell it. This is one of the bright spots of investment homes in that the expenses and depreciation of the home can help you take a "loss" toward your income tax. When you sell, the depreciation is "recaptured" but you can delay the potential gains tax indefinitely thru 1031 exchanges. 

** Certain disclosures must be made to tenants, such as the presence or possibility of lead based paint (built before 1978), and noise disclosure in Chesterfield (Spirit airport). 

** Tenant rights are a separate area of the law, although I do not know it well enough to detail it. Treat the tenant right, as you would want to be treated. 

Having said all of this, purchasing and holding homes for rent is still quite popular and can be very profitable, just realize there are rules to play by and we can all live in peace. 

_______________________________