Don't know if we should sell, rent or get a HELOC to purchase 2 homes?
Member since 2026 · 9 posts · 5 votes
Don't know if we should sell, rent or get a HELOC to purchase 2 homes?
Most Popular Reply
Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
9mo@Matthew Williams, a few thoughts:
1. Renting your current home would be putting all your eggs in 1 basket. Either it would be going well and you would barely notice or it would be going TERRIBLY and it would be all you could think about.
2. Renting your current house from another state means paying a PM or trying to manage from afar. Either way you will be away from the property which makes it harder especially if you have no experience landlording. That raises the risk of things going sideways as well.
3. Right now you have a tax exemption of $500k profit if you sell this house because it was your primary residence. If you rent it out, in a few years that will go away. Nobody wants to pay the tax man if they don't need to!
4. You mention airBnB as something you are interested in whether you keep and rent your current home or not. I would start there. I would sell the current home, buy a new home and try your hand at airBnB. Then you will be making your next decision with that experience in hand. Maybe you'll want to do MORE airBnBs or maybe you won't want to invest actively at all.
5. You say at the beginning of your post that you want "passive income", while technically a long term rental managed by a PM would be "passive", it isn't no work or no thought. An airBnB in your own home would certainly NOT be passive, that is a JOB and a fair bit of active work.
People who get into real estate investing especially small mom & pop operators often become enthralled with the work. Dipping your toes in the water would let you gauge your interest in the work involved.
6. As a side note, if you sell and purchase a new home in cash you can access that equity later on with a HELOC or cash-out refi if you want to tap the equity and use it to invest further.
7. Think of the decision to keep your existing home similar to the decision to purchase a rental. NOBODY would buy a $600k property to rent it for only $2800-3000. They would want $5500+.
If you rented for $2800 and after expenses profited $2000 per month or $24k per year that would be a 4% CoC return basically on your $600k equity. You could get the same result by plopping the $600k in a HYSA (High Yield Savings Account) and the return would be guaranteed and insured and 100% passive.
19 Replies
- 9moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 970 votes
For your goals, generating passive income and possibly running an Airbnb, many investors in Midwest markets are finding great opportunities. You can get homes with strong cash flow, lower entry prices, and good short-term rental potential, meaning your capital can go further and allow you to build multiple rental streams. Holding your current home and renting it, or selling and redeploying into multiple income-generating properties, are both viable strategies, and even modest capital can get you turnkey rentals or Airbnb-ready homes that produce reliable monthly income with lower risk than higher-cost coastal markets.
- Member since 2026 · 9 posts · 5 votes9mo
Quote from @Arman Ahmed:
For your goals, generating passive income and possibly running an Airbnb, many investors in Midwest markets are finding great opportunities. You can get homes with strong cash flow, lower entry prices, and good short-term rental potential, meaning your capital can go further and allow you to build multiple rental streams. Holding your current home and renting it, or selling and redeploying into multiple income-generating properties, are both viable strategies, and even modest capital can get you turnkey rentals or Airbnb-ready homes that produce reliable monthly income with lower risk than higher-cost coastal markets.
Thanks for responding. I'm going to answer your direct message. Thanks!
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes9mo
@Matthew Williams, a few thoughts:
1. Renting your current home would be putting all your eggs in 1 basket. Either it would be going well and you would barely notice or it would be going TERRIBLY and it would be all you could think about.
2. Renting your current house from another state means paying a PM or trying to manage from afar. Either way you will be away from the property which makes it harder especially if you have no experience landlording. That raises the risk of things going sideways as well.
3. Right now you have a tax exemption of $500k profit if you sell this house because it was your primary residence. If you rent it out, in a few years that will go away. Nobody wants to pay the tax man if they don't need to!
4. You mention airBnB as something you are interested in whether you keep and rent your current home or not. I would start there. I would sell the current home, buy a new home and try your hand at airBnB. Then you will be making your next decision with that experience in hand. Maybe you'll want to do MORE airBnBs or maybe you won't want to invest actively at all.
5. You say at the beginning of your post that you want "passive income", while technically a long term rental managed by a PM would be "passive", it isn't no work or no thought. An airBnB in your own home would certainly NOT be passive, that is a JOB and a fair bit of active work.
People who get into real estate investing especially small mom & pop operators often become enthralled with the work. Dipping your toes in the water would let you gauge your interest in the work involved.
6. As a side note, if you sell and purchase a new home in cash you can access that equity later on with a HELOC or cash-out refi if you want to tap the equity and use it to invest further.
7. Think of the decision to keep your existing home similar to the decision to purchase a rental. NOBODY would buy a $600k property to rent it for only $2800-3000. They would want $5500+.
If you rented for $2800 and after expenses profited $2000 per month or $24k per year that would be a 4% CoC return basically on your $600k equity. You could get the same result by plopping the $600k in a HYSA (High Yield Savings Account) and the return would be guaranteed and insured and 100% passive.
- Member since 2026 · 9 posts · 5 votes9mo
Quote from @Kevin Sobilo:
@Matthew Williams, a few thoughts:
1. Renting your current home would be putting all your eggs in 1 basket. Either it would be going well and you would barely notice or it would be going TERRIBLY and it would be all you could think about.
2. Renting your current house from another state means paying a PM or trying to manage from afar. Either way you will be away from the property which makes it harder especially if you have no experience landlording. That raises the risk of things going sideways as well.
3. Right now you have a tax exemption of $500k profit if you sell this house because it was your primary residence. If you rent it out, in a few years that will go away. Nobody wants to pay the tax man if they don't need to!
4. You mention airBnB as something you are interested in whether you keep and rent your current home or not. I would start there. I would sell the current home, buy a new home and try your hand at airBnB. Then you will be making your next decision with that experience in hand. Maybe you'll want to do MORE airBnBs or maybe you won't want to invest actively at all.
5. You say at the beginning of your post that you want "passive income", while technically a long term rental managed by a PM would be "passive", it isn't no work or no thought. An airBnB in your own home would certainly NOT be passive, that is a JOB and a fair bit of active work.
People who get into real estate investing especially small mom & pop operators often become enthralled with the work. Dipping your toes in the water would let you gauge your interest in the work involved.
6. As a side note, if you sell and purchase a new home in cash you can access that equity later on with a HELOC or cash-out refi if you want to tap the equity and use it to invest further.
7. Think of the decision to keep your existing home similar to the decision to purchase a rental.
If you rented for $2800 and after expenses profited $2000 per month or $24k per year that would be a 4% CoC return basically on your $600k equity. You could get the same result by plopping the $600k in a HYSA (High Yield Savings Account) and the return would be guaranteed and insured and 100% passive.
Thank you so much!!! Renting this house https://www.zillow.com/homedetails/9869-Heather-Moore-Ave-La... in particular would keep us up at night. We dont want to worry if our hose remains in good shape. Especially with your quote: NOBODY would buy a $600k property to rent it for only $2800-3000. They would want $5500+. This is so appreciate!!!! We've had so many discussions on what the best route is and my son is the one that told us about this site. I think the best course of action is to sell and then buy a property with a separate entrance or build over the garage and test the waters with renting or air bnbing it. We are looking at places where in the end result will be 500,000 or less. We would then find out if we like being a landlord or air bnbing. If not, then we have a house that might be attractive to another buyer where they could test the waters.
Thanks again for responding!!!
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes9mo
I would sell current home for reasons @Kevin Sobilo noted most especially the capital gains exemption and avoiding oos landlording.
What is your target asset allocation (AA)? That will guide you. How long are you planning to work? How much do you spend each year? Is the $140,000 savings in stocks or do you have additional funds in the market? AA and expenses are crucial because you are nearing retirement and unless you have a pension or a chunk in stock market in addition to social social security things are likely to be tight.- Member since 2026 · 9 posts · 5 votes9mo
Quote from @Jules Aton:
I would sell current home for reasons @Kevin Sobilo noted most especially the capital gains exemption and avoiding oos landlording.
What is your target asset allocation (AA)? That will guide you. How long are you planning to work? How much do you spend each year? Is the $140,000 savings in stocks or do you have additional funds in the market? AA and expenses are crucial because you are nearing retirement and unless you have a pension or a chunk in stock market in addition to social social security things are likely to be tight.Hi Jules,
Thanks so much for responding! After reading Kevins response we also agree moving forward with the sale makes sense. We are so inexperienced I had to look up what AA meant. We will definitely need to read that bad boy again to understand it completely.
To be totally transparent, we have had a traditional marriage so we've always had one income.There have been many rough years especially since I have not applied for a job since 1997. I have done many things which is now called an Entrepreneur. I plan to work until 67. I love what I do and feel way younger than my age. We roughly spend 5,000 a month. We have 500,000 plus in stocks. The 140,000 is with SOFI so we make 3.75 or close to that. I do not have a pension. *We also feel like things will be tight. We were in survival mode for many years and finally was able to put a little away at a time over the years. We have 3 kids and everything we own is in a trust for them.
With all that info do you have any insight moving forward?
Thanks!!
Here's what most miss - keep the house as rental and you'll pay capital gains later. Sell now as your primary residence and dodge that with the $500k exemption. Way more cash to work with. Have you run those tax numbers?
- Member since 2026 · 9 posts · 5 votes9mo
Quote from @Bo Smith:
Here's what most miss - keep the house as rental and you'll pay capital gains later. Sell now as your primary residence and dodge that with the $500k exemption. Way more cash to work with. Have you run those tax numbers?
Yes sir! After reading everyone's replies that seems to make the most sense.
Thank you so much for replying. It is appreciated!
Quote from @Matthew Williams:
Hi Matthew-
You and your wife are aged 62 and 60 and own your home that is paid off.
You are looking to move to another state to be closer to the grandchildren and would like to buy properties that will generate passive income-congratulations!
Also, you wonder if you should rent your current house or sell it and buy another property with cash for less money and then also have the downpayment for a second home with an Airbnb space.
If your current house is in a moderately appreciating market, think about getting a line of credit just to have it available on that house, and find a well reviewed property manager to manage the property as a rental when you move.
Then, with your savings you have for investing outside of your house, you can use that to put money down on the house you move to by the grandchildren. Think about looking for a duplex that is in an area that one of the units can be used as an Airbnb.
To Your Success!
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes9mo
Worth mentioning I'm obviously not a financial professional so take this with a grain of salt but I would recommend reading up on AA. I like a fairly simple 3 bucket plan with TSM index funds, RE and a relatively small amount in bonds/T-bills/HYSA to protect against SORR...more reading ;)
With $500k in stocks and $550k in primary residence you should be in good shape. I'm planning to retire at 65yo and base my needs on 30 years which is probably more than enough since the average life expectancy in US is 79 last I read. I'm guessing your social security will be in the $30,000 a year range and I would plan on continuing to spend $60,000 a year. It doesn't seem like most have a significant reduction in retirement spending especially in the early years based on lifestyle creep, cost of Medicare and inflation. If my math is correct you are looking in the area of a total need of $1,000,000 outside of social security so you are essentially there and anything above should be gravy. Well done.
- Member since 2026 · 9 posts · 5 votes9mo
Thanks for the encouragement!
Some days I feel like we have enough. Some days I feel like how are we going to survive. Having a home paid off helps the mind. What the stocks have done the last 6 months sometimes gets a little nerve wracking. If I were 42 or even 52 it wouldn't bother me at all.
I thought I was done with homework but looks I need to be an expert in AA (not the one I attended in my 20's :0) and now SORR.
It sucks not knowing this stuff at my age but I'm open to always learning.
Thanks!
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes9moNo worries, many people don't know this stuff at any age and some of it is just the icing on the cake anyway. Your 20s AA was worthwhile to get you to consider net worth AA now. :) Agree 100% about stock market, in my 40s and 50s I didn't bat an eye just kept shoveling money in. And it is weird but I get more anxious when the market is riding high than when it is low. I keep reminding myself to follow my AA and never panic sell. When you are closer to buying your new home maybe start a thread about whether to pay cash or finance as there are many strategies to consider.
Quote from @Matthew Williams:
Thanks for the encouragement!
Some days I feel like we have enough. Some days I feel like how are we going to survive. Having a home paid off helps the mind. What the stocks have done the last 6 months sometimes gets a little nerve wracking. If I were 42 or even 52 it wouldn't bother me at all.
I thought I was done with homework but looks I need to be an expert in AA (not the one I attended in my 20's :0) and now SORR.
It sucks not knowing this stuff at my age but I'm open to always learning.
Thanks!
- Member since 2026 · 9 posts · 5 votes9mo
Thank you for taking the time to respond.
We have a lot of decisions to make and appreciate all of the info you all have posted.
Thanks!
- Member since 2026 · 9 posts · 5 votes9mo
For peace of mind I couldn't have a mortgage again. But someone is coming to see our house for a second time. They were here yesterday so hopefully I can pose the question. https://www.zillow.com/homedetails/9869-Heather-Moore-Ave-La...
Interesting that you get more anxious when it is up. I definitely don't.
Yeah when it had that huge drop what 6 months ago my wife had to talk me off the ledge and then she said were putting another 40 grand in so we did that and that worked out.
- 9moTyler DickensPro MemberMember since 2026 · 1 post · 0 votes
Hi,
HELOC's are notoriously known for extremely high interest rates. From a lender POV I would leverage debt. I would sell the current home you have now use that for a down payment. Go buy 2 SFR in a promising market. Rent one and live in the other. Depending on your pricing preference you could afford two SFR with 600K, depending on the market of course. After 2-3 years I would refinance.
- 9moDave FosterBusiness MemberQualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
@Matthew Williams, If you decided to sell your property, you would be able to take the first $500k of the gain tax-free with the 121 exclusion as long as youve lived in the property for at least two out of the previous five years of it being your primary residence. You could allocate that however you want. Tax-free is hard to beat!!!
If you decided to try renting out your property, you would still have three years to take advantage of the 121 exclusion if you decided to sell the property. Since you would have converted the property to investment, you could also do a 1031 exchange, which allows you to defer all of the tax and reinvest it in other investment proeprty/properties. So if there's any additional tax after the 121 exclusion, you could defer the remainder in a 1031. And if you don't do the 121 excluison you could still do the 1031 anytime.
My 2 cents would be to not leave a rental behind you if you're just starting out as landlords. Especially since all of the profit is going to be tax-free anyway.
The 1031 Investor5140 Reviews - Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes8mo
Tough call! Honestly, if you don't need the cash right now, holding onto the original place can be a great long-term play, but the "accidental landlord" life isn't for everyone. The HELOC route is interesting if the numbers work, but rates are still tricky. Have you run the numbers on what it would cash flow as a long-term rental vs. the monthly payment on the new HELOC?
- Realtor · OH · Member since 2026 · 122 posts · 77 votes8mo
Rent your current $600k home for ~$2,800/month. After taxes and maintenance, that’s roughly $2,300/month passive income. Use your $140k cash as a 20–25% down payment on a $350k–$450k property for Airbnb or a long-term rental. Make sure it cash flows without touching stocks—assume 50–60% Airbnb occupancy or realistic long-term rents.
Selling your current home and buying cash simplifies life but sacrifices steady rental income. HELOCs add risk with variable rates—best avoided at your stage.
Bottom line: keep the current home rented, buy a second income property, and maintain a 6–12 month expense reserve. This maximizes cash flow, keeps appreciation, and positions you near family.
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