Rent my house vs. buying a rental property

[Account Closed]

I am so confuse and in need of some expert advice...

We owned a house and current on our mortgage. We can rent our house out for $2K per month. Our mortgage is $1500.

Plan A: We move and rent a place for $1500; Rent our house for $2K, cash flow $500.

Or...

Plan B: We buy a rental property in a less desirable area with a mortgage of $80K ($20K down); and rent that one out with rent ranging from $700-$900, before expenses and reserves.

Thanks.

[Kyle Hipp]

sounds like your current home is in a place you love and also needs some work. I would personally stay in the house and fix it up yourselves. Learn all you can about repairs around the home. Once you home is in great condition with all the projects done that should help bring it out from under water. If not look at refinancing to a lower rate if possible, maybe a cash-in to make it work. If you have a great home in a neighborhood you love why leave? Get your experience understanding how a house works. Then work on saving money again to purchase a duplex or something along those line with 20-25% down in the next year or two. You have no reason to rush.

It seems that you want the kids to stay in your school district so to move would just be to say you are a landlord while also being a tenant, I don't see a real benefit.