My husband and I are in the US on H1B visas. We're looking to buy a
home; and the current owners of the home want to move out 2 months
after closing, and want us to rent it to them for the 2 months.
Effectively, we will be landlords for 2 months and have additional
income from the purchase. Is this against immigration law?

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Request for Question Clarification by cynthia-ga on 20 Oct 2005 23:19 PDT

No idea, but talk to your agent. It may be possible to apply/credit
the rent towards your down payment, closing costs, or any number of
other closing costs..

According to the following two sources, your H1B visa status
does not prevent you from legally receiving rental income.  Regarding
the advisability of such a transaction, you certainly want to have a
contract clearly stating the duration of the rental agreement and
providing you with protection in the event they do not vacate the
residence on time.  Consultation with a real estate attorney with
experience in this area would be advisable.

Sincerely,

Wonko

"mgasior : May an H1B-visa holder have a passive income such as rental
income or income from dividends in the US? Thank-you!

SPEAKER_Attorney_Murthy : Yes, an H1B or other foreign national is
allowed to invest in any enterprise in the U.S. No problem! Investment
or rental income is not the same as compensation for services."

"MurthyChat Session" Law Office of Sheela Murthy (November 6, 2000)
http://www.murthy.com/chatlogs/chat1106.html

"I am working on an H1B visa and just started with my Green Card
application.  I bought a house a few months ago.  I now have the
opportunity to move to another state (with another company).  What are
the rules regarding renting my house to someone else?  Am I allowed to
receive such income?

Being in H-1B status does not impact your ability to receive rental
income or other non-employment income.  However, such income will need
to be reported on your annual income tax return."

"Ask VisaLaw.com" by Marc Topoleski, Siskind Susser(2003) Siskind Susser

Search terms: H1B visa "rental income"

Aside from the legality (you probably need a tax attorney to answer
that), it is always dangerous to do a rentback to sellers. These
situations seem to commonly cause big headaches and the sellers never
seem to be out of "their" house on time. Make a solid written
agreement with penalties for delays and indemnification for failure to
perform.

Mark has got a point.  If the sellers can present documentation that
they have a lease or purchase contract to justify their staying for
two months, that might be okay  - with an agreement such as Mark has
suggested.  If they think the terms are onerous and demure, well, that
suggests that they are not so sure that they will have somewhere to
move to in two months.  If they cannot provide justification, that
says a lot.  Don't take any promises.
Yes, talk to the real estate agent:  he/she wants to make the sale,
and he has got a buyer.  Finding another one that would agree to the
two months' rental would make him have to start all over.

Rentbacks are generally not a good idea.  You have the possibility of
damage to the house while the old owners are in there-- you have to
notice the damage and argue about it with the old owners who will
usually say "Oh, it was like that when we closed."  Most buyers refuse
to rentback to the seller, except on an extremely  short term basis,
by which I mean a few days, not a month or more.  What about
postponing the closing for the two months- then they could move out on
the day of closing.  You could ask them for any morgtage penalty you
have to pay to extend your rate. . .  just a thought.

Good luck.