Which house should be my primary residence?

[Nicole Farley]

Hello! My first time posting as I am brand new to the game. I will be looking at a property this week from a private seller. It’s in the neighborhood I originally wanted to buy in after my divorce but couldn’t find anything. I’m very content and happy where I’m at right now but would eventually like to move back to that neighborhood as both my aging parents live there. So which of these houses should I live in? 

Current house:

Purchased December 2020, 

$92,000, owe $81,000, worth $160,000 now

2.75% 30-year fixed, total payment $559

Could rent for $1500/month

Possible new house purchasing from an acquaintance. He uses as a rental but his ex-wife (now girlfriend) is the tenant so he has fixed it up for her and it should be move-in ready. I haven’t looked at it yet and I don’t know the price but he has given me first opportunity to look next week when she moves out. I’ve prequalified for a mortgage as long as I have a signed lease saying I’m renting my current house. 

New house:

Won’t pay over $190,000

6.525%, 30-year fixed, total payment $1138

Could rent for $1500/ month

So both houses could rent for the same thing, but which one should be my primary residence for tax purposes, depreciation, writing off interest, etc. I could rent the new one for a few years and then move into it. But I don’t know if that’s a good idea because I don’t want tenants messing with a house I plan to eventually live in.

Sorry if I didn’t use proper terminology but I’m only on my second book…. I’m still learning 😁