Newbie seeking advice on rental property strategy

[Mark Y]

I'm a married 47 year old from Phoenix who is looking to purchase a rental property for a couple of reasons. I'd like to get some tax relief and at the same time do some additional investing for retirement.

My wife and I have no kids and have lived in our current home for the last 12.5 years. We currently owe about 145k on our property that is valued about 450k. I believe we have about 15 years left on our mortgage. Our interest rate is 4.5%. So we have about $300k in "dead equity".

I'm thinking of refinancing our home for $250k, 30 year loan. That would leave me with about 100k. We want to put about 25k into our home for improvements and I would also take 15k and pay off a car.

With the other $60k, we would like to purchase a rental property in the 200k range. I would take out a mortgage for the remaining, which should allow us to have a small cash flow.

We would probably hold on to the rental property for a few years at least.

I am very ignorant at this whole rental property business. I'm looking for advice on whether or not the decision above is sound.

FWIW, I'm a software engineer for a major corporation making in the low 6 figures. I'm not looking to quit my day job, just get some tax breaks and hopefully make some money when we sell the rental.

Thanks for reading my introduction. Any comments and advice sent my way would be greatly appreciated