keep in mind the tax position of capital gains - after 6 years. after you have been renting out a property, that was previously your residence - ie one in which you lived in for 12 months, then you start paying capital gains tax , in proportion, to the years rented out(the tax office has booklets on this aspect). whatever you do, sell the property before the 6 years. not being too certain about what your change over costs would be, but if you ignored them, then really you should sell your present house, use the proceeds to buy your new house, and if you really wanted a rental property, then borrow 100% against the new rental property
personally, i would never bother with rental property - far too much bother, and if you are buying after a period of sustained price increases, then there is certain to be a period of static prices. my last foray into rental property, saw a 50% increase in the period between 1992, and 1998. but after loan interest, ongoing costs, cleaning the swimming pool between tenants etc etc - i would not bother again. mind you, my ex wife, saw a 3 fold increase in her property, which she bought in 1987, and sold in 1998. she sold , just in time, before the 6 years was up. i had another rental property, which i bought in about 1978, and sold a few years later, for 15% less, than what i paid for it. also i lost every week on the difference between costs, and rental income - that was a disaster
each to there own, but i prefer the stock market. even though , i am led to believe that most fortunes, are made in real estate, not the stockmarket
