Debating renting primary VA residence and purchasing new primary

[Richard Hamm]

Hello!

I have been a long time listener of the podcast and read a few different investment books and I am interested in building a single family rental home portfolio.

I currently live in and have been rehabbing a 4 bedroom 2.5 bath home with a 2 car garage on an acre lot in a cul de sac. It is updated nicely with new carpet, granite throughout, new appliances etc. This home is in a great area within walking distance to an elementary school, a middle school, (both great schools) Whole foods, and the list goes on!

The home was purchased with my VA loan at 2.99% with a remaining mortgage of 393k currently. The payment is $2,196 with my current insurance. I looked in here to find information on how to gauge a good rent price. I used rent-o-meter to find a projected rent of $2,500. I also talk to a local rental management company tomorrow to see what their projected rent would be for the property. I have also looked at Trulia, Zillow, and the MLS at rentals nearby.

I would like to purchase a new home in a development nearby my Fiancé's family. I can use the remaining VA eligibility I have to purchase with no money down around 358k. My plan would be to buy a home to live in for 2ish years with the goal to rent that home as well.

My main questions/points of thought for this forum would be:

1. I could potentially sell this home in the mid 500's currently. I would be in a good spot with equity, but my instinct is that I should hold on to the property. Is the interest rate, location, and possible(likely) appreciation of this home worth keeping it? Do the numbers sound too close? This is an older home that could potentially still have maintenance issues. Do I sell and take the equity and look for another property? One main point here would be I do really like this house personally.

2. What questions am I not answering? I am open to any and all to make sure I am looking at this correctly.

3. When considering the new purchase what factors do you look at when purchasing a primary home that you plan to turn into a rental? My first thought or slight apprehension is that the property will not be bought at a significant market discount of any kind. Could this hinder my ability to be competitive in the rental market when I am ready to list? These are the questions that come to my mind.

Thank you for any/all advice and your time!