renting and owning

DH and I are thinking about renting our house out and then renting something for ourselves in order to save more money in the bank, and still be able to build equity to sell in a few years and buy something bigger for us to live in. after playing with numbers based on what homes in our area rent for and what we would spend on rent, we would comfortably be saving about $1200/month in the bank which we could potentially draw from if we needed to do anything (ie - plumber, etc) for the renter if need be. has anyone else ever done this and what was the experience? any thoughts in general? trying to decide if this is a good idea.

Message edited 10/4/2009 5:57:41 PM.

Re: renting and owning

One downside is having a tenant. I hate being a landlord.

Re: renting and owning

I worked for someone who did this. He owned multiple properties that he rented out snd he rented his own home too. He did this for yearsd and made a ton of money. he recently built his own dream house on the water in Mil basin Brooklyn.

Re: renting and owning

DH and I are toying with the same idea right now. we need to buy a bigger place. it would be cheaper for us to rent and not buy, but I wouldn't feel "bad" renting if we were renting out our current place out.

Re: renting and owning

I would suggest you talk to your accountant because you might have to pay taxes on the income from rent even though it's going straight to rent for another apt. My mom is a landlord and she pays taxes on her rent, which is consider income. Maybe it's different for my mom since it's her only source of income. Or you can see if your tenant is will to pay in cash.