Thinking about selling your property — or renting it out instead? Whether you're a landlord weighing whether to cash out of a rental, or a homeowner considering converting your primary residence into an investment property, this calculator models three strategies side by side: sell now and invest the proceeds, keep renting and invest the cash flow, or keep renting and save conservatively. Tax brackets, depreciation, capital gains, NIIT, passive loss rules, §121 exclusions, and 1031 exchanges are all calculated automatically from your income and filing status.
| Yr | Sell | Inv Bal (investment portfolio if you keep and invest cash flow) | Keep (Invest) | Sav Bal (HYSA if you keep) | Keep (Savings) | Δ Lead | Cash Flow | Tax Shield | Prop Val | Mortgage | Notes |
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Sell path: Net proceeds (after closing costs, mortgage payoff, capital gains, depreciation recapture, applicable exclusions) invested at the specified return rate.
Keep (Invest) path: Rental income minus all expenses (PITI, maintenance, management, vacancy, CapEx). Net cash flow invested at the same return rate. Annual depreciation tax shield added as cash inflow. "Keep Wealth" = equity if sold at that year + accumulated investment balance.
Keep (Cash) path: Same property and rental assumptions, but net cash flow earns the cash return rate (e.g., HYSA) instead of market returns. Shows the conservative outcome — isolates real estate return from stock market reinvestment assumptions. Set cash return to 0% for the absolute floor.
Depreciation tax shield: Annual depreciation (purchase price × 85% ÷ 27.5 yrs) offsets rental income. If net rental loss and passive losses are allowed (AGI-dependent), excess loss offsets W-2 income up to $25K, saving taxes at your marginal rate. Phased out between $100K–$150K AGI.
Passive loss rules: Must actively participate. Full $25K allowance under $100K AGI, phased out $100K–$150K, eliminated above $150K. Suspended losses accumulate and release upon sale.
Capital gains: LTCG rate auto-calculated from income and filing status. NIIT (3.8%) applied above $200K/$250K thresholds. §121 exclusion available if primary residence 2 of last 5 years.
1031 exchange: When enabled, defers all capital gains and depreciation recapture tax on sale, increasing net proceeds.
Not modeled: AMT, state-specific depreciation rules, cost segregation, Real Estate Professional status (unlimited passive losses), installment sales, property-specific reassessment caps (e.g., Prop 13/Prop 2½), or changes to tax law over the analysis period.