Military move 1st potential rental

[Aaron Ver]

Current mortgage with VA at 2.x% with 278,000 left in South Carolina less than 4k worth in maintenance. Comps show the home is worth around 420,000 in an excellent neighborhood with potentially low vacancy rate if i were to rent. Current credit score is about 640 with 30k worth of consumer debt between wife and I not including vehicles. Getting stationed in Newport, RI within the next 5 months. In order to purchase my next buy and hold, should I just sell the house completely due to short turnaround time, do a cashout refinance and rent, or take a HELOC in order to pay off debt and use the remaining on a down percent for the next property. Any information is appreciated. Thanks in advance.

[Brian Poirrier]

@Aaron Ver Given that your property tax basis and interest is so low compared to recent appreciation and rate increases I would suggest talking with some local property managers to provide more detailed rent comps that just zillow.  If you can cash flow enough after management expenses in order to keep a reserves for any emergency/ big maintenance items than it would be the best investment you could make for you family.  Also look into what the property taxes will increase to after the county catches on to it being a rental in terms of calculating your cash flow.  The win is not only cash flow but rents have been increasing 10%+ a year and should average 3%+ or more per year as well as they are paying down your principal on your mortgage.  It also almost becomes tax free money in terms of all the write offs for interest, insurance, taxes, management, maintenance, and the no cash write off of "depreciation" that nothing else on the stock market would provide and you won't get a chance again to buy an investment property at your prior purchase price again with lower taxes and that sort of rate of return usually.  

Again this all depends on more details but that is what I generally see when people ask me about this as a local multifamily agent and investor.  I'm not big on buying single family homes purposefully as a rental but when you are in the situation with that option I would suggest keeping it.