Primary to Rental- Pros and Cons?

[Ab John]

Hello everybody,

I am totally new to RE world and I am glad I found BP. I have searched the forums for an answer because I don't want to be the one newbie that asks questions which has been answered 100s of times here. I saw similar posts that explains taxes and stuff, but not anything specific to my situation.

Here is my situation that I would like to get yalls thoughts:

- The home we currently live in was bought in 2016 Oct

- We are planning to move this year or next year and would like to keep the current home as rental (was looking to refinance this current home in case we end up keeping this as rental)

- There are two houses near by that rented out at close to $2k/ month

- Would it be better to sell this house, get the equity built in to put down on the next primary house and a separate property for rental?

What are the things I need to be thinking about before making a decision? Thank you to whoever is going to reply. Your thoughts are helping a total newbie with no mentor. 

Have a great day!!

[Darius Ogloza]

This is basically the strategy we first employed - turning our first home into a rental when we moved to our current home in 2009.  The strategy worked very well for us as we have built up a lot of equity and have had renters pay down the last 12 years of our mortgage on the property.  If you have sufficient capital to buy your next home without selling your current home, if the current home is well located in a stable to growing (preferably) area, and if it cash flows, i would highly recommend you pursue this strategy.  Assuming there has been some growth in your area, why buy an investment property at 2020 prices when you can have one at 2016 prices?