Keeping First Home as Rental

[Nick Symon]

Hello BP, 

I'm not an investor yet, but my wife and I are considering holding on to our first home when we move to a bigger place and renting it out.  When we move, we'll own the first house free and clear, but are considering taking out a mortgage on it for the downpayment of the new house. How would any of you think about this situation from a real estate investing perspective? 

[Joe Villeneuve]

As long as your current house has positive cash flow after you refinance it, it's a great idea.  It would mean the tenant of the rental property (your current home) is paying for both that house and the DP on your new home for you.