Landlords
Landlord math: should you keep it or sell it?
Most landlords decide to keep or sell based on gut feeling. Gut feeling ignores the math, and the math is where the answer lives. Here's how to actually run it.
The real-return calculation
Start with annual rent. Then subtract reality: vacancy — budget for at least one empty month a year (roughly 8%); maintenance and repairs — 1–2% of the property's value per year is the standard planning figure, more for older homes; insurance and property taxes; management — either the fee you'd pay a manager or the value of your own time; and turnover costs — cleaning, re-listing, and repairs between tenants, which routinely run a month's rent or more. What's left is your true annual return.
Now divide by your equity
This is the step everyone skips. If the property is worth $200,000 and you clear $8,000 a year after all costs, that's a 4% return on the equity sitting in the house — before counting your hours. Ask honestly what that equity could earn elsewhere, and what your evenings are worth.
Price your time
Log your landlord hours for one month — tenant calls, coordinating repairs, bookkeeping, driving to the property. Multiply by what an hour of your time is worth. Many landlords discover their "investment" pays them less per hour than their day job, on an asset they could convert to cash.
When professional management is the fix
If the property cash-flows well and the work is what's grinding you down — not the numbers — a management company may solve it. Managers typically charge a percentage of the monthly rent plus leasing fees; in exchange, the late-night calls stop being yours. This works when the property is fundamentally sound and the problem is your involvement.
When selling is the fix
When returns are thin or negative after honest math. When deferred maintenance is avalanching faster than rent covers it. When the tenant situation won't improve with turnover. When the equity could fund something that matters more. And remember: you can sell with tenants in place to a direct buyer — no eviction, no vacancy, no awkward conversations.
Running your numbers? Talk it through with us — no obligation, no pressure.