Wealth Trajectory
Keep it, sell & rent, or move up?
sell & rent vs. keep · year 20
−$1,137,829behind if you sell & rent
By year 20: $2,478,807 keeping vs $1,340,978 if you sell & rent — each counting home equity (after appreciation and paydown) plus your investment portfolio. Rent is modeled at ~0.5%/mo of current home value (national rent-to-price ratio), inflating 3%/yr; sale proceeds (after 7% selling costs and payoff) get invested at the market return.
This isn’t a full net-worth statement — it leaves out other properties, retirement outside the balance above, and other debts. Those are the same across every path, so the number that matters is the gap between scenarios, not the total.
Keep house · yr 20
$2,478,807
home equity + investments
Sell & rent · yr 20
$1,340,978
$-1,137,829 vs keep
Move up · yr 20
$1,729,809
$-748,998 vs keep
Home value (20yr)
$1,314,674
gross value @ 4%/yr appreciation
What this models:
- Mortgage amortization (interest + principal paydown each month)
- Home appreciation at your stated rate
- Investment portfolio growth + monthly contribution
- Sale proceeds (after 7% selling costs) go to investments in sell scenarios
- Move-up assumes proceeds become down payment on a bigger home (3% closing on new)
What this doesn’t model:
- Capital gains tax at sale. §121 exclusion ($250k single / $500k MFJ) covers most primary-home sales, but appreciated long-held homes or move-up sales can blow past it. Use the cap-gains calc. Also: cap-gains on the investment portfolio at exit isn’t modeled.
- Mortgage interest deduction. If you itemize, the keep / move-up scenarios get a tax benefit not credited here. Use the MID calc.
- Property taxes & insurance. Assumed similar across scenarios. In move-up, property tax can spike on reassessment (CA Prop 13 reset, FL Save Our Homes loss, etc.). Can be a multi-thousand-dollar annual hit not reflected here.
- Maintenance / capex on the house (typically 1-2% of value/yr) materially understates the cost of homeownership in keep / move-up scenarios.
- Sequence-of-returns risk on investments: the model uses smooth compounding; real markets are lumpy.
- Rent growth assumption is 3%/yr; reality varies wildly by market and was 5-8%/yr in many metros 2021-2024.
- Closing-cost frictions on the move-up. 3% closing on the new home is modeled, but agent commission on the sale is bundled into the 7% selling cost, not credited separately.