Keep house 1
$1,652,819
Home equity after appreciation and paydown. No rental or S&P cash on this path.
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Sell vs buy
Keep house 1, or sell it and buy house 2 as a rental. Compare total wealth after 25 years — home equity plus cash, rent, and investments.
Total wealth after 25 years
Keeping house 1 comes out ahead by $485,377
Sell house 1, buy house 2
$1,167,441
House 2 equity, net rent, S&P, and leftover sale cash. Cash-only profit: $689,320.
Keep house 1 · 25 years
Cash made is the left-hand total. House leftover is not cash.
- Cash rent collected
- $0
- S&P profit
- $0
- Fixed monthly P&I
- $2,800
- Principal paid (amortized)
- $390,000
- Remaining mortgage
- Paid off
- House 1 future value (not counted)
- $1,652,819
- Still in the house (not counted)
- $1,652,819
- Money made
- $0
Sell & buy house 2 · 25 years
Same path as the right total above.
Year 1 rent
- Gross rent
- $1,800
- Property tax (1.49%)
- −$248
- Insurance (0.38%)
- −$63
- Landlord fees (8.00% of rent)
- −$144
- Net monthly income
- $1,344
If you sell today
- Sale costs (6%)
- −$37,200
- Net proceeds after the mortgage
- $192,800
- House 2 purchase costs (3%)
- −$6,000
- Cash left after buying
- $0
- House 2 loan if proceeds fall short
- −$13,200
Year 25 position
- Year-25 net monthly rent
- $1,155
- 25-year rental income
- $377,007
- S&P contributions
- −$150,000
- S&P profit
- $325,513
- S&P 500 monthly ($500/mo at 8.00%)
- $475,513
- Unused of $200,000 house budget (one-time)
- $0
- S&P 500 lump ($0 at 8.00%, reinvested)
- $0
- House 2 future value (not counted)
- $328,121
- Leftover sale cash (returned equity, not counted)
- $0
- Remaining house 2 loan
- −$13,200
- Money made
- $689,320
Money made is cash: net rent plus S&P profit (gains above what you contributed). Leftover house value is shown but not counted. House 1 uses a normal amortizing loan: today's principal plus interest becomes a fixed monthly P&I payment, then principal rises each month until the balance is gone. House 1 state is for context; taxes and insurance there are not subtracted from the keep path. House 2 tax and insurance scale with appreciated value, so net rent falls if gross rent stays flat. Leftover cash earns 0%. A purchase shortfall stays as unpaid house 2 debt. Monthly S&P 500 contributions compound at 8% and are added on top of rental cash. If house 2 costs less than $200,000, the unused amount is invested once in the S&P 500 at 8% with profits reinvested.