CalculateRealEstateROI

Investing

When should I sell a rental?

When trapped equity yields under 5% on current value, or when the asset has outgrown its strategy role.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

When trapped equity yields under 5% on current value, or when the asset has outgrown its strategy role.

Expanded explanation

Compute Return on Equity (cash flow + appreciation / current equity). If it drops below your portfolio average, sell or 1031 into a higher-yielding asset. Other triggers: deferred capex exceeding 25% of value, deteriorating submarket, life events.

Examples

  • $300k equity producing $9k = 3% ROE → 1031 into 6% asset.

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