Sell paid off home or split into rental property.

[Marc Appel]

I’m 34, lots of years left to invest. My wife and I are lucky enough to have our home paid off. We are looking to move into a similar priced home. Is it more economical to sell our home and put all that money into a new home so we don’t need mortgage, or take out a mortgage on our current home and turn it into a rental property. Take the money we mortgaged on our current home and use that money for a down payment on our new home and take out another mortgage. Thanks for your thoughts, Marc

[Jake S.]

There are several things you could do!

If you want to go down the road of renting your home out, and getting a new mortgage on another property, you certainly could!

You could also sell your house, move into your new one and refinance it to pull some equity out, to cover a down payment on a property that will provide you with solid cash flow and great returns.

You might not get the best returns possible by just renting out your current home, but you will own it free and clear, so your cash flow will be high.

I would prefer to leverage some of the banks money, and not own any properties free and clear (within reason), and possibly get 1 or more solid cash flowing/high return properties