The two numbers this comparison puts side by side
Keeping a rental earns four ways at once — cash flow, principal paydown, appreciation, and the depreciation tax shelter — and almost nobody adds all four up. Selling frees a single number: the after-tax check, once selling costs, depreciation recapture, capital gains, the 3.8% NIIT, and state tax all come out. This tool runs both forward year by year so you can see which one actually wins for your numbers, not a rule of thumb.
The keep line each year is that year's after-tax sale check — computed by the exact sale engine that runs the live calculator — plus a side fund built from every year's net-of-tax cash flow, reinvested at your alternative return. The sell line is simply today's check compounding at that same rate. Where the lines cross (if they do) is the year the rental "pays for itself" against your alternative.
Full framework, plain English
This tool is the calculator; Should I sell my rental property? is the reasoning behind it — the four engines of keeping, why the after-tax check (not your equity) is the honest opportunity cost of selling, and the tiebreakers (Section 121, 1031, step-up at death) that can override the math entirely.
Read the framework →Keep-vs-sell questions, answered
How does the keep-vs-sell comparison work?
It compares two paths from today: selling now and investing the after-tax check at your alternative return, versus keeping the rental — collecting rent, paying operating costs and the mortgage, and banking the depreciation tax shelter — then selling in whichever year you choose. The keep path's value in a given year is that year's after-tax sale check (computed by the same engine as the live calculator) plus the side fund built from every year's net cash flow.
What is the "crossover year"?
The year one path overtakes the other, if it does. Some scenarios never cross — one path leads the whole horizon — and some genuinely flip, usually because a cheap locked-in mortgage or a suspended-loss release changes which path compounds faster.
What does the tax drag input do?
It's an optional annual haircut applied to the alternative return on both paths, for modeling a taxable brokerage account instead of a tax-advantaged one. Leave it at 0 if you're already entering an after-tax alternative return.
What isn't this tool modeling?
The marginal tax rate on rental income is a single input rather than bracket-computed, suspended passive losses are assumed fully deductible at a taxable sale to an unrelated party, the $25,000 active-participation loss allowance isn't modeled, and side-fund growth uses a flat tax-drag input rather than full basis tracking. See "How this is calculated" above the FAQ for the complete list.
Is this tax advice?
No. It's a planning estimate to help you compare two paths before talking to a professional. Confirm any number that matters with a licensed CPA before acting on a sale.