Posted by Dave T on September 04, 2009 at 06:39:36:
Can you do both?
Buy the lower price-range rental property with positive cash flow. Sell your current home, then move up to a larger, better located primary residence.
I would not keep your current home as a rental if it won’t generate a positive cash flow.
Primary residence or small rental W - Posted by james_CA
Posted by james_CA on September 03, 2009 at 12:33:27:
I am planning to purchase a 2nd home but trying to decide whether it should be an investment(rental) home around 200K or lower range, or a bigger primary residence around 400K+ in nice area and school district in my city with 5-10% down and rent out our current home.
My hesitation on a bigger home is that our payment will be higher around 2,100 plus pmi around 150 under we get a big discount on a home where LTV might be 80. We like the idea of the bigger home on a bigger lot with no HOA where we can do more things versus current home in community with limited parkingspaces, no curb parking for guests and sometimes loud noise from swimming pool/neighbor on late nights.
On the other hand buying a small rental to rent at 20-25% has only 600-700 mortgage payment.
Any good advice on pro and con? My goal is to have good cash flow and good properties that will appreciate well.