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Keep the rental, or cash out? See what your equity is really earning.

Long-held South Bay rentals often have enormous equity and modest cash flow once vacancy, repairs, insurance, and reserves are counted — even with a low Prop 13 tax bill. This tool shows your real cash flow and the return on the equity you'd free by selling.

Results

Enter your numbers and press Calculate. Nothing here is an offer or an appraisal.

How it's calculated

The math, in plain language

Formula

Effective gross income = rent × 12 × (1 − vacancy). Operating expenses = taxes + insurance + maintenance + capital reserve + management + other. NOI = income − expenses. Cash flow = NOI − annual mortgage payments.
Net proceeds if sold = value × (1 − selling costs) − mortgage balance.
Return on equity = annual cash flow ÷ net proceeds. It ignores appreciation, principal paydown, and depreciation tax benefits, which favor holding — and your time, rent-cap risk, and relocation-payment exposure, which favor selling. Weigh both.

Assumptions and limits

Defaults are examples. Use your actual rent roll, tax bill, insurance premium, and repair history.
Capital reserve is a planning figure for big-ticket items that don't happen every year; skipping it overstates cash flow.
Under AB 1482 and the City of San Diego's ordinance, rent increases on most older units are capped and no-fault terminations require relocation assistance — neither is modeled here.
Taxes on sale (depreciation recapture, federal and California capital gains, 1031 options) are not modeled — talk to a CPA before selling.
This tool is for general planning only. It is not an offer, an appraisal, or legal, tax, or financial advice. Results depend entirely on the numbers you enter.

FAQ

Questions about this tool

My cash flow is positive. Why would I sell?

Positive cash flow can still be a poor return on a large amount of equity, or come with time and risk you no longer want. The return-on-equity line is the number to look at, alongside your appetite for landlording under California's rules.

What does a good return on equity look like?

That depends on your alternatives and risk tolerance — we deliberately don't set a benchmark. Compare it to what the freed-up cash could earn elsewhere.

Can I sell with the tenant in place?

Yes. We buy occupied rentals and take over the lease. See our tenant-occupied and rental property pages.

Should I do a 1031 exchange?

It can defer tax if you're buying another investment property and set it up with a qualified intermediary before closing. Ask your CPA or an exchange company; we'll coordinate with them.

Want to discuss an actual offer?

The calculator uses your guesses. We use real comparable sales and a walkthrough. Enter the address — it's free and there's no obligation.

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