Considerations for buying a new build and renting existing home

[Peter S.]

Hello BP,

I've been saving up capital to purchase an OOS turnkey for the past 1.5 years. Was thinking about putting in about 30-35k and getting something in a B/B+ area in the Midwest. Recently I've seen some older homes in the City Park West area of town purchased, torn down, and replaced with a multi-unit building. 

Now I'm wondering if it would be a better financial strategy to buy one of the properties, owner occupy and rent out my existing home. My thought process is that rather than use 20% down on a 130-160 property in the Midwest I could instead use 5% down and get something worth 550K or more. 

From a numbers standpoint I could probably make about $700-800 profit renting my current home which would subsidize the new mortgage payment on the new property. The property I'm looking at would also have AirBnB potential as well. To me this seems like a no brainer but I'm also sure that there's something I'm not considering. What does everyone else think.