Natalie and Norm own a small house in British Columbia that they are quickly outgrowing. He is 43, she is 35. They have two pre-school-age children.

Both have good jobs with defined benefit pension plans. Together they bring in about $163,000 a year plus rental income of more than $1,000 a month from their basement apartment.

“Our plan is to save for a down payment on a larger home over the next four years and keep our current home as a rental,” Natalie writes in an e-mail. They have recently stopped contributing to their registered retirement savings plans for the time being in order to save for the new home, which will cost about $650,000. They figure they can save about $166,000.

“So my question is, does it make sense to keep our current home as a rental when we buy that next home?” Natalie asks. Or would they be better off just selling the house and using the proceeds to help pay for the new one?

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