Questions, Questions - what is the best buy-and-hold strategy?

[Shalanna L. Pirtle]

BP Family, deciding which route to take to take to acquire a rental property and would love your two cents. I live in Charlotte, NC and own my primary residence in the fastest growing region of the county. I am debating between either: a) acquiring a rental in one of the local transitional neighborhoods via conventional or owner finance (and would need to make a down payment) or b) renting out my single family home and moving to a new place (as yet identified nearby). Rents for a property in the transitional neighborhoods will range from $1000-$1100, with a 10% CAP rate. Rents in the .5 mile radius of my home range from $1650-$2000, and I would likely be able to demand around $1800 for mine, with about a 15% (conservative estimate) or greater CAP. (Those numbers alone may well make the decision a no brainer, but read on!) The following are some considerations I'm toying with: I built my home new and have lived in it for almost 9 years. It requires no rehab, the major systems/roof should be all good for another couple years and then some and likely only needs some cosmetic touches to get it ready for a renter (coat of paint in some rooms, etc.) Note that the rental properties I am considering are all turnkey or are already cash flowing, so no significant (or zero) costs for make-ready on that front either. If I move, there will be obvious move and possibly storage costs, as well as the loss of time spent purging/packing/unpacking. (Even if I paid packers, still have to get organized). I suspect the next place will be temporary (1-2 years), unless it's a super great deal, so that means those move costs will make an appearance again in a short time period. If I move, what do I move too? An SFH I purchase (that requires a down payment to acquire)? An SFH I rent (obviously if I rent, I lose the tax benefits of primary home-ownership, but might that be off-set by the rental income and business expenses?) A 2, 3, or 4-plex that I buy, living in one unit and renting the others (have heard conflicting views about some multi-families being harder to rent)? If I'm purchasing the next property, do I look for one that requires a little rehab and can be flipped in a year or more, or find one that is mostly move-in ready (but less expensive than my current home)? Or do I just set the max price point and work with whatever deal pops up in those numbers rather than trying to narrow the field now? Re: acquisition costs - I can put my hands on enough funds to acquire the transitional neighborhood rental and have a good-sized cash reserve today. If renting my place and purchasing a new primary residence, I'll likely need a little more time to build up enough for a down payment and have a cash reserve. In either case, once the property is acquired, I'll likely need 8-10 months (maybe more) to build up another down payment/reserves to acquire another property (this obviously doesn't refer to "subject to" and other creative finance deals). I could be over-thinking it or maybe haven't asked enough questions! But I would appreciate your thoughts as I noodle on all of this, especially from my fellow Queen City experts. Thanks!!

[Shalanna L. Pirtle]

@Thomas S. We have different perspectives for sure. I will 100% disagree with you about home ownership being more expensive than renting an SFH in the Charlotte market and particularly in the 28278 and 28273 zip codes for Steele Creek up for discussion in this post. My decisions to refi were right on the money for where I was 12 mos ago and in prior years, especially as I only began considering REI in the last 3-4 months and began thinking about the possibility of renting my primary residence in the last 72 hours. Hence, the reason for the post. By no means is my home a financial burden, the question at issue was merely how to put it and the savings I already do have to their best and highest use. I'm also not sure how you could possibly assess the amount of effort I am willing to put into my future based off one comment I made about preferring to stay close to family - the family who by the way happens to be my 70+ year old mother who moved to Charlotte solely to be closer to me, her only child, as she ages. I won't bore you with further details on that situation as they frankly have no bearing on the original questions at issue. Your uniformed assessment on that point is what is off the mark, sir. We'll have to agree to disagree on some of your comments but I do appreciate you and others taking the time to respond. Thanks!