What should my next move be?

[Jason Kosowan]

Hi everyone

I've posted a few questions on BP and was given very good advice and information, so thought I'd try it again. :)

I bought my primary residence a few years ago but it's too big, too expensive, so me and the Mrs. want to downsize. The house itself is in a very good area (it held it's value even during this down time) and I can definitely foresee it as an appreciating asset in the next 10 years.

But, right now, rents in this area will not cover the mortgage and insurance. It's short by about $100-200 / month.

I have enough cash to get a loan for another (cheaper) place without selling the current house.

From an investment standpoint, what should be the next move?

Should I sell the current house, rent it out or something else? If I keep it, I'd have to shell out a couple hundred a month to keep things going, but once/if rents "catch up" with the place, I'll have a strong asset for the future.

If I sell and put all my money into the new place, my living expenses will be very low and could be covered by my rental income.

Some other options: Sell it using seller-financing in some sort of wrap-around-mortgage deal. Don't move at all, just get another rental with the savings.