Just bought my 2nd rental property. Am I doing this right?
Quick background on how I got here.
In 2009 my wife and I moved into our first home together . It was a brand new home for 109k here in Texas. In 2015 we were blessed by some very grateful friends and we were able to pay our home off in full.
Fast forward to May 2016 we decide to move into our bigger home for 180k. At this time we decided rather than sell our first home and move it all into this one we just bought, we would try renting it first.
Fast forward to today. We are charging$1200 a month. We owe around $4100 a year in taxes & insurance. We have been using the $1200 to basically pay for our current mortgage which is closer to $1400.
My thinking now is, why take advantage of just one home paid for when we could leverage that paid for home and buy more rental property? So a rent property pops up for sale from someone that I know and we buy it for 111k. It's been bringing in $1200 a month. After talking to a few people I decide on going with a 20 year bank note amortized over 20. I use 20% down from my paid for rental. My payment is around $787 not including insurance ($1100 a year) and from what I can tell not including taxes either (around $1700 a year). So, after PITI I'm pretty much breaking even.
Did I make the right move here ? Should I leverage this paid for home and use 20% down to buy even more? This is very much a long term investment and I have no means of making any type of short gain out of these.