Results
Edit inputsDelta at year 30
-$1,422,907
buy net worth − left in the market · beats the market above 4.2%/yr appreciation
Crossover
Yr 1
Break-even appr.
4.2%
Net proceeds Yr30
$1,099,470
Yr-1 tax saved
+$84,373
30-year Delta vs. staying all-in the market
Your 20% plan bold · presets mutedAppreciation sensitivity (20% down)
Delta at year 30Buying beats “left in the market” only if appreciation ≥ 4.2%/yr. You’ve set 2.0%.
| Appreciation / yr | Delta at year 30 |
|---|---|
| 0.0% | -$2,112,564 |
| 2.0%(yours) | -$1,422,907 |
| 3.0% | -$899,391 |
| 4.0% | -$205,676 |
| 5.0% | +$711,087 |
| 6.0% | +$1,919,404 |
Holding revenue, rate, and costs fixed. The market baseline grows at 7%/yr — appreciation has to overcome that gap.
Starting position today · 20% down
Liquid capital (in market)$850,000
Down payment (20%)−$170,000
Closing (3%)−$25,500
Furnishing−$25,000
Remaining in the market$629,500
Home equity (= your down payment)$170,000
Mortgage (borrowed from the bank → seller)$680,000
Buy net worth today$799,500
Left in the market (if you don’t buy)$850,000
Difference today-$50,500
The mortgage never enters your portfolio — it goes to the seller. From here, the market pot grows at your market return (± the rental’s yearly cash flow) and equity grows with appreciation + principal paydown.
Year-1 depreciation
Building basis (80% of price)$680,000
Cost-seg amount (30%)$204,000
Year-1 bonus (100%)$204,000
Year-1 depreciation total$221,309
Year-1 tax saved (@ 37%)+$84,373
Projected tax at exit (Year 30)
| Component | Amount | Tax |
|---|---|---|
| §1245 recapture @37% | $204,000 | -$75,480 |
| §1250 unrecap. @25% | $476,000 | -$119,000 |
| Cap gains @20% | $689,657 | -$137,931 |
| Selling costs 7% | — | -$107,776 |
Equity at exit$1,539,657
After-tax net proceeds$1,099,470
Pragmatic additive model (§1250 ≤25% + §1245 ordinary + LT cap gains). Verify against a CPA before relying on it.
Not tax, legal, or investment advice. All figures are estimates produced by a simplified model and may differ materially from actual results. Consult a qualified tax, legal, and financial professional before making any decision.
Year-by-year ledger (20% down)
Money in the market — buy scenario vs. left in the market
| Yr | Earn | Pay | Verdict | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Equity | Market | Buy net worth | Opex | Interest | Tax saved | Net cash flow | Left in the market | Delta | |
| Now | $170k | $630k | $800k | $0 | $0 | $0 | $0 | $850k | -$51k |
| 1 | $195k | $744k | $938k | $44k | $44k | $84k | $70k | $910k | $29k |
| 2 | $220k | $789k | $1.0M | $46k | $43k | $9k | -$6k | $973k | $36k |
| 3 | $246k | $837k | $1.1M | $47k | $43k | $10k | -$8k | $1.0M | $42k |
| 4 | $274k | $887k | $1.2M | $48k | $42k | $10k | -$9k | $1.1M | $46k |
| 5 | $302k | $939k | $1.2M | $50k | $42k | $10k | -$10k | $1.2M | $49k |
| 6 | $331k | $994k | $1.3M | $51k | $41k | $10k | -$11k | $1.3M | $50k |
| 7 | $362k | $1.1M | $1.4M | $53k | $40k | $11k | -$12k | $1.4M | $48k |
| 8 | $393k | $1.1M | $1.5M | $54k | $40k | $11k | -$13k | $1.5M | $44k |
| 9 | $426k | $1.2M | $1.6M | $56k | $39k | $11k | -$15k | $1.6M | $38k |
| 10 | $460k | $1.2M | $1.7M | $58k | $38k | $12k | -$16k | $1.7M | $28k |
| 11 | $495k | $1.3M | $1.8M | $59k | $37k | $12k | -$18k | $1.8M | $16k |
| 12 | $532k | $1.4M | $1.9M | $61k | $36k | $12k | -$19k | $1.9M | -$281 |
| 13 | $570k | $1.5M | $2.0M | $63k | $35k | $13k | -$21k | $2.0M | -$20k |
| 14 | $609k | $1.5M | $2.1M | $65k | $34k | $13k | -$22k | $2.2M | -$44k |
| 15 | $651k | $1.6M | $2.3M | $67k | $33k | $13k | -$24k | $2.3M | -$72k |
| 16 | $694k | $1.7M | $2.4M | $69k | $31k | $13k | -$26k | $2.5M | -$105k |
| 17 | $738k | $1.8M | $2.5M | $71k | $30k | $14k | -$27k | $2.7M | -$144k |
| 18 | $785k | $1.9M | $2.7M | $73k | $29k | $14k | -$29k | $2.9M | -$188k |
| 19 | $834k | $2.0M | $2.8M | $75k | $27k | $14k | -$31k | $3.1M | -$239k |
| 20 | $885k | $2.1M | $3.0M | $78k | $26k | $14k | -$33k | $3.3M | -$297k |
| 21 | $938k | $2.2M | $3.2M | $80k | $24k | $15k | -$35k | $3.5M | -$362k |
| 22 | $993k | $2.3M | $3.3M | $82k | $22k | $15k | -$38k | $3.8M | -$435k |
| 23 | $1.1M | $2.5M | $3.5M | $85k | $20k | $15k | -$40k | $4.0M | -$517k |
| 24 | $1.1M | $2.6M | $3.7M | $87k | $18k | $15k | -$42k | $4.3M | -$608k |
| 25 | $1.2M | $2.7M | $3.9M | $90k | $16k | $15k | -$45k | $4.6M | -$710k |
| 26 | $1.2M | $2.9M | $4.1M | $93k | $13k | $15k | -$47k | $4.9M | -$823k |
| 27 | $1.3M | $3.0M | $4.3M | $95k | $11k | $15k | -$50k | $5.3M | -$948k |
| 28 | $1.4M | $3.2M | $4.6M | $98k | $8k | $12k | -$56k | $5.7M | -$1.1M |
| 29 | $1.5M | $3.3M | $4.8M | $101k | $5k | $9k | -$62k | $6.0M | -$1.2M |
| 30 | $1.5M | $3.5M | $5.0M | $104k | $2k | $9k | -$65k | $6.5M | -$1.4M |