When thinking about buying a second home and renting out your first home to cover your existing loan, it’s a good idea to have a cash buffer.

Deciding how much you’ll need depends on a number of factors,

How much will you need to cover repayments?
How long are other properties in the area often vacated between leases? Do you have enough cash saved to make the repayments should it be untenanted?
If you’re on a variable rate home loan, are you able to service the loan if rates increase?
Do you have enough funds to cover any emergency repairs?
How long can you cover the loan repayments if your personal circumstances change?

If you decide to keep your current property and buy another home, you should consider your own needs, circumstances and any unexpected situations that could arise.