Seeing Advice on split living space home

[Nat Love]

I have a split level home that I want to rent out. At the moment, it’s basically set up for two separate living spaces with separate entrances (the other level just lacks a kitchenette). 

The house is slightly outdated, needs some cosmetic improvements, but is definitely turn key ready. 

The home has no mortgage, full equity. I want to move into another home nearby, (I have a family and don’t want to share the home) but I’m worried that because home prices are so high here, I may be just breaking even when calculating my cash flow. 

The area is generally appreciating Year over year so the equity growth is good. 

Is it wise to take out a HELOC to renovate my current house to get a higher rent rate? Is it worth it to add a kitchenette to my current house to make it into a true separate living space?

Is it also wise to use a HELOC to put a down payment on the next house I want to move into, rinse and repeat? Or should I save for an FHA loan?


I do have a debt to income ratio of about 30% even before taking out the HELOC if that makes any difference. 

Thanks for any advice.