Hi all. My wife and I think we are going to buy a first rental property and wanted to check in with all of you experts, particularly because our plan might be a little different than most.

Us: 55 and 51 years old, one teenage kid.

Goals: retire early and save some on taxes.

Wants: To move out of Seattle in the next 5-10 years. Relocate in the Bay Area near family, possibly second home in Bend.

Financial background: We are financially stable. No debt, solid retirement and other savings, own 2 million plus home outright. Income is high and stable.

Risk tolerance: low. We don't like financial risk.

Plan: we want to buy a 3 bedroom single family home in a stable, moderately-priced neighborhood like Issaquah Highlands. Something in the 1-1.3 million range. We have the cash and do not plan to use financing. We want a place that is in built around or after 2000 that could stand cosmetic interior upgrades. We would rent this house out for 4 or 5 years until our kid leaves for college. Rent would cover expenses and make a bit of money on top of that.

We would move into this rental house and sell our primary residence in Seattle once our kid is out of the house. I would then upgrade the Issaquah rental house (aka our new primary). I'm good at this sort of work and have had great success "slow motion flipping" primary residences. We would also look for a second home in California or Oregon at that point.

We'd stay in the former rental house at least long enough to not be taxed on $500k of gains. And probably long enough to avoid high 5 or 6 figure state income taxes in CA or OR. We'd spend increasing time in CA or OR. When ready to retire we'd sell the newly improved Issaquah house. Retirement likely between 2030-2032 for the 51 year old (if I can make her stop working - she like her job).

I realize that is plan is not leveraging much of anything, but we aren't risk takers and very thankfully feel like we have plenty without pushing it.

I'd really appreciate advice on potential pitfalls, tax issues with rentals I'm not considering, etc. It is important to my wife particularly that if we but a rental house it be good enough (and in a good enough neighborhood) that she'll feel content living in it for a while.

Thanks very much!

Seattle, Washington

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