Anyone rent out their primary residence and move into a multifam

[Ryan Tuleja]

Hey folks,

So here's the deal. My wife and I have spent the last few years saving and scraping together a small nest egg that we want to invest in real estate. Unfortunately, as we dig deeper into our local market, it just doesn't seem to be enough to get us into a decently cash flowing property that is not in a war zone.

We already own a home in a very nice area that we do not want to sell as we are watching it appreciate almost by the month. However, we are considering putting it up for rent and using our savings to buy a duplex that we can live in one side while renting the other out. Unfortunately, the market rents will not allow for positive cashflow after capex (10%), Vacancy (10%), repairs and management (10%). We actually lose about $600 per year in this scenario.

Here is my question. Assuming we can buy a duplex and our tenant covers the mortgage, would  the loss on our current house be tolerable, or would you just hold and keep saving?