Buying my Second home as an investment or primary.

[Christian Riordan]

I bought a primary residence Exactly a year ago and I have been house hacking the other bedrooms in my house for the last year to save up for another home. I live in a college town where homes go for about 200k  and I have found interested students, got a signed lease, and collected security deposit for the upcoming school year beginning in august. I will be renting my home out for 1650, and my current mortgage is 800(will go up to 1000 if I get a new primary residence and convert my present home into an investment). I’ve got almost 40k cash I make 55k year and have 740 credit score and I’m wondering how difficult it would be to use that rental income to offset the debt of my mortgage and therefore qualify to get a new primary residence, with money to spare. Or should I just buy an investment property and use up all my cash. I would prefer to continue house hacking, and buy another home with only 5 percent down. I know there is a lot of variables. Any insight would help.