A killer plan

Our primary residence: we pay $1569 per month…on all bills…if we rent it out…the rents here are around $1800 per month…we could move out and have + cashflow…and move into a rental at $1000-$1200 per month. We both work and make 64K a year…

Save $$$ and pay off debt (9K) Has anyone else done this???
Thanks for any replies! I realize there are bad scenerios…ie tenant not paying rent…etc, but with cash reserves of 20K, is this idea possible? Thank for any input!!!

It’s possible…but thin.

You say you can rent it for $1800 - are you sure?

You say all of your “bills” for the house are $1569 a month. Does this include maintenance? management? vacancy rate?

On the surface, this looks like a $231 a month PCF but I’ll bet it’s a lot closer to a break even.


am I missing something?

income $1800 in rent
minus $1569 in payment and bills
minus $1000 in rent for new residence

NCF $-769

Doesn’t look good to me.


They’ve got to live somewhere and there’s a cost for doing that…I personally prefer having a mortgage, having something in the end (other than a stack of rent receipts), and prefer the government’s assistance (in the form of tax breaks) – but each to his/her own.


D-S brown, what they are saying is, they wont have to pay out as much per month. I dont know what they consider for their bills, but if they only pay rent for 1000, and they recieve a rent payment of 1800 -their 1569 going out to the house, they make 231 so they are saving money off of monthly payments. but as KD said, their going to probably get screwed at tax time since they will have to claim that 1800 as income and will only beable to deduct the interest off of the rental house and will not be able to deduct that $1000 rent payment… It would probably be an ok situation though if they bought another house and had payments of $1000 per month cuz they can deduct those taxes. Im not a tax expert, but it works something like that and they should definitly consult a CPA/ Tax advisor cuz it looks like a losing situation to me.


My opinion is that, if you’re comfortable in your house, stay there. You will have the trouble of finding a new place (either to rent or to buy), the trouble of packing your goods, unpacking them, doing a ‘make ready’ on your old place (and probably having to clean someone else’s crud in the new place, etc., etc.

…and, like I said in my earlier post, you’re going to break even on the old property (maybe).

It’s a “killer plan” alright!


For $231 a month, get a part-part-time job. Black’s point regarding the tax implications are definitely worthy of serious consideration. Plus there are minors issues you would repair for a tenant that you may decide to live with yourself. And then there is another one, moving is expensive! Put that into your numbers.

Good luck to you.

Thank goodness I have all of you to give me sound advice!
Thanks for all the repiles! We will stay put, and maybe move to our vacation home, and rent this home out. We may be able to get up to 2K a month here…
Thanks again; I have made money investing in RE, but I seem to be dyslexic when it comes to all the important numbers…I am learning though, thanks again! ;D