Many potential homebuyers today are stuck at a crossroads: should I buy a house now in this high-rate environment, or wait for interest rates to fall? This video explores a clever strategy that may let you “have your cake and eat it too” — keeping your low-rate mortgage while acquiring a new property. The approach isn’t totally risk-free, but it might offer a path forward for those who don’t want to passively wait.
1. The Dilemma: Buy now or wait?
If you wait for interest rates to drop, you risk missing out on rising home prices.
If you buy now, you might face high borrowing costs.
The video’s core proposal is a hybrid route: convert your existing home into a rental, keep your existing mortgage (if it has favorable terms), and purchase a second home with a new mortgage.
2. Strategy: Turn your current home into a rental + buy a new one
A. Why this works (potential advantages)
Lock in your low mortgage rate — if your current home has a lower rate than what you’d get today, keeping that rate can be very valuable over time.
Capture appreciation — you don’t lose out on future price gains in your current market.
Diversify your investment — you become a landlord, effectively having two real estate assets.
Flexibility — you could someday move back, or refinance, or sell if that’s advantageous.
B. Key conditions & caveats to watch out for
Rental income must be sufficient
You’ll need the new rent to at least cover (or help cover) your costs: existing mortgage, maintenance, property management, vacancies, etc.Cash flow and financial buffer
This is not a “free ride.” Expect periods of vacancy, repairs, or tenant turnover. You must have reserves.Local landlord/tenant regulations
Every region has different rules about evictions, regulations, minimum rental housing standards, etc. Know them in your area.Tax implications
Converting your primary residence to a rental changes deductions, depreciation, capital gains treatment, etc. Consult a tax professional.Financing new home
Lenders will look at your DTI (debt-to-income), your existing mortgage payment, rental income (which may be discounted), and possibly need a stronger down payment or reserves.Risk of being overextended
Taking on two properties means double responsibility. If one property underperforms, it may drag your overall finances.
3. Step-by-Step Outline of the Plan
| Step | Action | Purpose / Consideration |
|---|---|---|
| 1 | Assess your current mortgage rate vs market | To see how much “value” your existing rate gives you |
| 2 | Check rental market and estimate rent | To determine whether it’s feasible financially |
| 3 | Calculate all costs (insurance, maintenance, property tax, vacancy buffer) | To see net cash flow or deficit |
| 4 | Talk to a lender about buying a new property | Understand your borrowing capacity considering your existing mortgage |
| 5 | Understand local laws & taxes | To avoid surprises as a landlord |
| 6 | Execute — buy new, convert old | Move tenants in (if ready), manage both properties |
| 7 | Monitor finances and be ready to adjust | E.g. refinance, sell, or exit if it becomes too burdensome |
4. Is it right for you? When it makes sense
This strategy tends to work best if:
You currently have a significantly lower mortgage rate than what she’s likely to get on a new loan.
The local rental market is strong (low vacancy, decent rents).
You are financially stable and have a buffer for unexpected expenses.
You are comfortable being a landlord (or can hire someone to manage for you).
If, on the other hand, your current rate is already close to current market rates, or rentals are weak in your area, you might not get enough upside to justify the extra risk.
5. Additional tips & real-world considerations
Factor in turnover costs — cleaning, repairs, tenant placement fees.
Use conservative rent estimates — assume some months vacancy.
Insure properly — landlord insurance vs homeowner insurance differ.
Hire a good property manager if you don’t want to handle tenants yourself.
Plan exit strategies — if things go south, you’ll want flexibility to sell or refinance.
6. Final thoughts & takeaway
The “don’t choose — do both” strategy is creative. It allows you to keep a low mortgage rate while still seizing real estate opportunities. But it’s not a magic bullet — it requires careful financial planning, risk tolerance, and due diligence.
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