The Idea of Renting out Current Home to Buy a New Home

[Kathleen Park]

I was wondering if any real estate professionals like you can prove this to be a good move in terms of investing. If you were me, what would you focus more on?

I live in the West Town area of Chicago. I’ve recently been thinking about renting out my current primary home (built & moved in 2019: value $550K: have a mortgage loan of 2.65%) and buying a new primary home (built in 2020: value $700K: thinking 20% down +80% loan to purchase) in the same area. However, I have a few concerns:

Pros:

• Living condition: 1400 sqft → 1700 sqft with some boutique features
• The rental market seems good in this area.
• Another property is added to my existing real estate portfolio, which currently includes two other properties.

Cons:

• Interest rate: 7% - No guarantee of decreasing the rate, which means there might be no opportunity for refinancing in the future.
• The current home is too new to be rented out.
• People often say not to buy property in Chicago due to high taxes and low appreciation.
• There’s no necessity of moving since I have a decent primary home.

Any professional advice would be helpful. I really appreciate your time!