You need to talk to an accountant or an attorney before you consider doing this.

No, you can't write off the mortgage interest and taxes in the same way as you can when it is your personal, non-income-producing residence.

There are tax breaks for rental properties, but they are different and reclassifying it as rental property may lose you some other valuable tax breaks, like the one covering capitial gains on sale of a principal residence.

Your insurance will change, too, when it becomes a rental. Even broaching the subject with your insurance broker may trigger problems as many insurance companies will cancel the policy if the house sits vacant, and that may trigger issues with your mortgage holder as you are no doubt required to have loss insurance equal to value of the note.

It is possible (and legal) to "rent-to-own" but that is a complicated, and somewhat risky way, to sell your house. And your mortgage may become due in full, even if you aren't getting enough from the rental payments to cover the note.

State laws vary on the atypical ways of selling property.

Get advice before you do this.

If the propective purchasers can't meet your carrying costs, they will never be able to qualify for a mortgage on their own. You don't want to be a private lender in this case. Evicting simple tenants for non-payment is hard enough; dispossessing deliquent installment purchasers is exponentially more complex and expensive. The $300/mo you're losing on the carrying costs will seem like chicken feed.

Sorry!

L..