Keep or Sell

Should you keep your LA County rental property or sell it and invest the proceeds in a broad stock index fund? This calculator helps you compare the two paths under transparent, adjustable assumptions.

How to use this calculator

  1. Start with a scenario preset (Conservative, Base, or Optimistic) to set market assumptions, then customize individual inputs.
  2. Fill in your property details — the first section (Property & Rent) is open by default. Expand other sections to fine-tune costs, taxes, and stock assumptions.
  3. Scroll to the results to see the estimated outcome, chart, break-even points, and which inputs matter most.

LA County reality checklist

Time horizon:
Your Property
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No mortgage? Set payment to $0 below.
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auto
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You manage the property yourself (time cost not modeled).

Mortgage payment, balance, cost basis, property tax, and depreciation are auto-calculated from your inputs. Override any of them directly or in Advanced Assumptions.

Under these assumptions, after 10 years…

Keeping appears better by $65,325

This is an estimate based on simplified assumptions — not financial advice.

Keep — Total Estimated Wealth

$898,075

Property value: $1,128,479

Cumulative cash flow: $72,507

Cap rate today: 3.1%

Year 1 NOI: $24,953

Sell & Invest — Portfolio Value

$832,750

Selling costs: $48,000

Estimated sale tax: $116,116

Investable proceeds: $332,973

Cumulative Wealth Over Time

Break-Even Points

Selling ties keeping if stocks return 10.8% /yr

Keeping ties selling if property appreciates 2.9% /yr

Most Sensitive To

1. Property appreciation — +1pp appreciation favors keeping (±$113,897 swing per 1pp)

2. Stock market return — +1pp stock return favors selling (±$79,178 swing per 1pp)

3. Rent growth — +1pp rent growth favors keeping (±$22,930 swing per 1pp)

Important caveats

  • "Keep" wealth includes illiquid property equity — you'd owe selling costs and taxes to access it.
  • Cash flows from keeping are modeled as held in cash (0% return), not reinvested.
  • Tax calculations are simplified approximations. Consult a CPA for your specific situation.
  • Past performance of stocks or real estate does not predict future results.

Frequently Asked Questions

Is this calculator accurate enough to make a decision?
No single calculator can capture your full financial picture. This tool gives you a directional estimate under simplified assumptions. Use it to understand which factors matter most, then consult a CPA or financial advisor before making a major decision.
Why does the 'keep' scenario show illiquid wealth?
When you keep the property, your equity is locked in real estate. You'd need to sell (and pay selling costs and taxes) to access it. The calculator shows total wealth including this illiquid equity, which slightly favors keeping. Keep this in mind when comparing.
How are taxes calculated?
Taxes are approximated using the effective rates you provide for federal long-term capital gains, California state income tax, and depreciation recapture. These are simplified — your actual tax bill depends on your total income, filing status, deductions, and other factors. This is not tax advice.
What about Prop 13?
California's Proposition 13 caps property tax increases at 2% per year based on the assessed value at purchase. If you've owned the property for a long time, your assessed value (and tax bill) may be far below market value. The default property tax input assumes a Prop 13 assessed value. If you sell and buy a replacement property, the new assessment would be based on the new purchase price.
Does this account for inflation?
All numbers are nominal (not inflation-adjusted). Both property appreciation and stock returns are shown in nominal terms. Since inflation affects both scenarios similarly, the comparison is still meaningful, but the dollar amounts will overstate future purchasing power.
What about 1031 exchanges?
A 1031 exchange lets you defer capital gains tax by reinvesting sale proceeds into a like-kind property. This calculator models selling and investing in stocks, not a 1031 exchange. If you're considering exchanging into another property, the analysis would be different.
How does the mortgage calculation work?
The calculator auto-estimates your monthly payment and remaining balance from your purchase price, mortgage start year, and loan term — assuming 20% down and the average fixed rate for that year. Monthly payments are subtracted from cash flow in the keep scenario. If you refinanced, change the mortgage start year to when the new loan began. You can always override the payment and balance fields directly.
What stock return should I use?
The US stock market (S&P 500) has returned roughly 10% nominal per year over the long run. Some advisors use 7-8% for more conservative planning. The calculator defaults to 10%. The sensitivity analysis will show you how much the result changes with different return assumptions.
Can I save or share my calculation?
Yes. Click 'Share link' to copy a URL that encodes all your inputs. Anyone opening that link will see the same calculation. Your most recent inputs are also saved in your browser automatically.

Assumptions & Disclaimers

This calculator is for informational and educational purposes only. It is not financial, tax, or legal advice. Results are estimates based on simplified models and the assumptions you provide.

Real estate and stock market investments involve risk. Past performance does not guarantee future results. Tax laws are complex and change frequently. Always consult qualified professionals (CPA, financial advisor, real estate attorney) before making major financial decisions.

Key simplifications: no mortgage amortization, no rent control modeling, no 1031 exchange option, nominal (not real) returns, no transaction timing effects, simplified tax calculations.