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No. of Recommendations: 1
(Also posted to the Real Estate Investing & Buying/selling a home boards)

Life in my new house is going well so far, but there's a new wrinkle I'm going to throw into things. I'm going to let out a room to a friend. He's trying to save cash to get his own place, and the rent at his apartment doesn't exactly help him out. I have loads of space, we get along well, and I'm happy to help him out.

Now, the question - should I report this as rental income? Or, more specifically, if I report it or not, what about the following:

1) What impact does this have on my mortgage? I know there's a distinction between primary-residence and investment-property; is there any negative side effect of blurring the line, ie "whoops, my note's due now" or "whoops, my rate just jumped .75%?

2) What is the impact of selling the home in the future? Again, I'll be living there, but it would also be a rental property.

3) What is the impact of this on investing in real estate in the future? I've read that unless you have previous landlord experience, you might have trouble getting a rental-property mortgage, since they won't allow you to show theoretical rental income when you apply. Would having a year's worth of documented rental income help later on?

4) What is the impact of this on deducting mortgage interest come tax season?

5) What is the impact of this on deducting home maintenance come tax season? I believe you can deduct a number of things on a rental property, again, the line seems blurred, since I'll still be living there.
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