Should I rent out my current residence?

[Josh Rothey]

So I live in a small rural community average rent goes for 1890 for a 3/2 in my zip code per the county data.

Current first house is a 3/2 I purchased in Jan 2021 for 210k currently owe about 180k with current value around 260k. Monthly costs are about 2k/month including fire insurance (high risk area). So that’d likely put me at a $100-200 deficit.

The prospect property I’d like has an attractive price of 270k with 600 more sqft and would be great for the fam to move into. I believe the mortgage will come out to around 3k/month which is fine but in the event I have to cover both 5k for several months would be difficult.

Should I proceed? I called a lender yesterday and they said if I had someone sign a lease with a deposit down I could use that income towards my new loan. Sorry if this is too much info im new to the rental game.

[Michele Fischer]

Personally, I would not keep a rental at an expected deficit, and I would not want a rental without a safety net to be able to cover six months of disasters.  With only one rental, you never know what costs or vacancy will come up.  With more rentals it becomes less likely that a loss will wipe you out.