Should You Rent Out Your Home Before Buying Your Next One?

More homeowners are asking me this lately: should I rent out my current home instead of selling it before I buy my next one? With mortgage rates well above what a lot of Central Texas homeowners locked in a few years back, it’s a real question worth running the numbers on.

I’m Robbie English, REALTOR and Broker with Uncommon Realty, and through Uncommon Rentals, I help homeowners work through exactly this decision.

TL;DR

Renting your current home lets you keep the low-rate loan and collect rental income at the same time.
You can often still qualify for a new mortgage on your next home while keeping the first one as a rental — a lender can confirm what applies to your specific numbers.
Selling gets you liquidity but gives up the loan and any further appreciation on that property.
Uncommon Rentals can manage the property if you go this route, so you’re not landlording it yourself.

Why This Question Comes Up Now

If your current mortgage is under 4%, that loan is worth holding onto — the gap between it and a rate on a new purchase can run into hundreds of dollars a month. Renting the home out instead of selling means a tenant is helping cover that low payment while you finance your next home separately. You end up building equity in two properties instead of one.

What You Need to Check First

Before deciding, run the actual numbers: what your current mortgage payment is, what the home would realistically rent for in your area, and whether that rental income (plus reserves for vacancy and maintenance) gets you to a workable outcome. Talk to your lender early about how carrying two mortgages affects your qualification for the next purchase — lenders often count a portion of projected rental income toward your debt-to-income ratio, but the specifics depend on the loan program and your full financial picture.

What to Watch Out For

Not every home makes sense as a rental, and not every owner wants to be a landlord even with help. The mistakes I see most often are underestimating repair and vacancy costs, overestimating achievable rent, and skipping proper tenant screening. If you’d rather not manage any of that yourself, Uncommon Rentals handles marketing, tenant screening, rent collection, and maintenance across Austin, Leander, Cedar Park, Round Rock, and Georgetown.

Let’s Look at Your Numbers

If you’re weighing this before your next purchase, I’m glad to walk through what your specific home would likely rent for, what that does to your monthly cash flow, and how it fits with buying your next home.

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I touched on a related piece of this here too: Austin Area One-Story Homes For Sale.