Hey everyone, I'm new to rental properties/BiggerPockets - any advice would be greatly appreciated!
Here's the situation: I'm thinking about moving. My current house is paid off and rather than selling it to pay for my new house, I'm thinking about renting it out. I would then mortgage my new home. Current house is valued around 160k and I'd buy a house around the same value. I purchased my house for $86k in 2009.
After a quick look at the numbers, I could get roughly $1000-$1500/month rent at my current house. It costs me around $300/month for taxes and insurance. I'm estimating my mortgage payment to be around $1000 on the new house. So I would have 2 houses appreciating in value instead of one, but then I would be losing money by paying mortgage interest on the new house and taxes on 2 houses.
I am new to investing in rental properties, so I would appreciate any feedback from you more experienced investors. My main concern is whether it would just be better financially to sell my current house and pay off my new house: no mortgage interest being paid out, taxes only on one house, no hassles dealing with a rental property. Any major problems or benefits that I am missing? To me, it looks like a lower risk way to get into real estate investing. Thank you in advance!
I would keep the current house and rent it out you would have excellent cash flow and that would be a start to building your portfolio.
Thanks John. I suppose I'm thinking more short term when it comes to selling in order to have a new house that is paid off. I'm essentially debt-free right now, so going back to having debt isn't appealing to me.
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