re: Buying new home - Renting current townhouse

Here’s what you want to consider, the ROI on the value of your house not necessarily what you paid or owed. If you can get $2500/ month but your home is worth $400k, that’s 7.5% gross rent to value. Not that great, most people shoot for over 10 or sell.

If you are making less than 8% and your mortgage is 6-8% and you can sell it tax free, imo taking the equity out for a down payment makes more sense.

But with a low mortgage interest and good rent coming in then I also understand wanting to diversify investments and get that cash flow starting.

The biggest rule of thumb, is don’t rent something you wouldn’t Otherwise buy to rent out. Look at yourself in the mirror and ask yourself if you would buy this home at $400k and rent it out. If not, strongly consider selling.