We currently have a $65k mortgage on our primary residence with a comfy $350/mo payment. We can and have put more towards the principal on a regular basis but we are very interested in obtaining a rental property in our town. The real estate market is hot and prices are generally inflated but the rental market is even hotter, less than 1% vacancy in our town. People are desperate to find places to live and a 4-year college will be opening up next year so it's not going to get any easier. So first question, despite elevated prices, is it worth buying a rental property when you still have a mortgage on your primary residence? Of note, in what I believe is a very Mustachian move, we are currently renting out 2 rooms in our house for $850/mo so we already more than cover our mortgage without our employment income.
The property is a tidy manufactured home with several important recent upgrades (roof, windows, flooring, furnace) on 0.25acre in a convenient neighborhood. One problem, however, is the age of the home. 1972. No banks will offer financing on a manuf home of that age. So, we are considering using cash and a large portion of an equity line. Is that a reasonable move?
Our goal would be to hold this property longterm. With property tax/insurance/equity line payment, we would expect to clear $500/mo.
Would appreciate any and all input, positive/negative, let me have it!
Thanks