Renting Primary Residence Then Moving Back

[Justin Juhan]

Good Day,

My wife and I are just getting started in real estate investing. We purchased an investment property (single family) at the end of last year an put in lots of sweat equity, it is now bringing in about $400 a month in income. We purchased our primary residence 3 years ago and did a recast on the mortgage after selling our previous primary so we have about 140k in equity.  By doing so our payment is low enough and our rent value is high enough in the area we could bring in $800-$1000 a month in income by renting it out. It is move in ready.

We would like to purchase a property to live in and fix up while we rent our primary for 2 years then move back in as our primary (once our first child is school age).

The advantages I see are essentially this sets up up to purchase at least 2 more properties (one with the extra income and one we would be living in)

The dis-advantages I see are potential tax issues.

What disadvantages, if any, do you see?

Thank you for any input on this situation.