Rent existing home or buy new rental property?
Hi–
I'm trying to develop a 5-10 year plan for myself. I see a few paths forward and am looking for some advice as I'm relatively new at this. Any thoughts would be greatly appreciated.
Background:
I'm 31, live in Oakland, CA. Have a 30y fixed mortgage @3.75% with 10% down that i'm 4 years into. Property value has appreciated significantly, as you might expect. I have been saving diligently as well – probably half the way towards a downpayment for a new property.
Path 1:
Refinance to 15 year, and work towards renting out my existing home. Looking at refi because expected rent would exceed refinanced monthly payment. If the market is still high when I begin renting it, I would likely rent myself until the market drops a bit, all while saving as much as I can, so I'll be ready to buy again when the market is better for buyers.
Path 2:
Keep saving and patiently look for a good deal on a rental property. Live in existing home until it becomes impractical (will outgrow this house when I have kids in ~6 yrs ??). Use rental income to grow savings and continue to invest in real estate without getting personal property involved.
Basically I think my question comes down to best use of my existing property. Is it best to hold onto it and rent it out when it's no longer the best place for me to live? Considering I bought it in 2012 (a much better buyers market), should I treat the property more as an asset and work to rent it out sooner rather than later?
Again, any advice would be greatly appreciated. Thank you.