I think your strategy is a smart one, but would tread very carefully in the Rent to Own arena--unless your tenant/buyers put down a substantial sum of money and have a thorough credit check.
If you are able to rent out your home and are comfortable with the financial results, then do so and move on to the home you really want. This market will recover, and you will hopefully come out whole.
I have referred a number of clients and investors to Gena Riede, who knows the Elk Grove market well and also authors http://www.SacramentoRealEstateVoice.com
Good luck with your transition!
Villa Sotheby's International Realty
877-818-8197 or 760-402-9101
You want to make sure you are completely aware of the risk you take in purchasing a second home. I personally have rentals and they have done well for us. But if you do not have a strong financial foundation to build on, this move could do your family harm. Work with a qualified mortgage professional to determine a budget to make sure you can safely pull this off financially. It is important if you make this move you have a plan! Good luck! Now is a great time to buy!
I agree with Roberta - the rent to own scenario requires a lot of care in how you set it up, and since you are waiting for appreciation to make the sale of your home attractive for you, that may also price your home/the monthly mortgage payments out of reach of the people who can afford to rent it now unless their wages go up between now and then, and counting that would concern me a lot, as wage increases had stopped in Sacramento County well before the real estate market started to decline.
HOWEVER, it depends on what your cash flow situation is with the current house. Can you rent it and cover the costs on a monthly basis?(- there's an investment analysis worksheet that can help you there...) Did you buy the home such that it would make a good rental? (Those that are much larger than 2000 sq ft, with a pool, or various personalized features may not make a good rental). Is the value of your home such that you are currently in a 'short sale' position should you be trying to sell your home?
I don't believe that the market pricing will recover quickly now, as it's being affected by so many new factors, such as gas prices and general economic indexes, as well as the foreclosure market. In addition, I believe that should you be forced to sell at a later time, the government programs for assisting homeowners does not apply to investment properties.
Your idea has merit, but there are a lot of factors to consider. I would also recommend you speaking with an accountant on the tax implications of your strategy. And make your decision based on CASHFLOW, not projected market appreciation.
I would love to help you find a great home too. and help you find tenants
First Team Real Estate
Excellent decision. This is the best time to buy if you are considering moving up or to another area. Renting out your current home would be sound advice and wait until the market changes to make the decision as to wether or not you wish to sell it or remain landlords.
I'd love to help you when you are ready.
If you want more information on Rent-to-Own, let me know. Good Luck
Keller Williams Realty