This calculator isolates one specific question, deliberately separated from the full yield and cash-flow calculations elsewhere in this cluster: what is the property's full capital value actually earning you each year, and how does that compare with simply investing the same sum elsewhere? It's the opportunity-cost check described in our Mortgage-Free Property Investment Guide, made concrete with your own numbers.
Why this comparison matters even if you're not planning to sell
Continuing to hold a mortgage-free property isn't a neutral, cost-free default, it's an active, ongoing choice to keep that specific amount of capital in that specific asset rather than anywhere else. This calculator doesn't tell you to sell if the property's return looks lower; it gives you the honest number so that continuing to hold it is a deliberate decision rather than one made by default, simply because selling never came up as an active question.
It doesn't account for capital growth (property values and investment portfolios can both appreciate, at different and uncertain rates), transaction costs of selling, capital gains tax on a sale, or non-financial factors like the effort of active property management versus a passive investment. Use this as a starting orientation, not a complete financial plan.
Frequently asked questions
What counts as "capital" in this calculation?
The property's full current market value, since that is the capital you are choosing to leave invested in this specific asset rather than release through a sale, regardless of whether you originally paid for the property or inherited it.
Is a low return on capital a sign I should sell the property?
Not automatically. A lower percentage return than an alternative investment is only one factor; selling triggers transaction costs and potentially capital gains tax, and the comparison should also weigh non-financial factors like risk tolerance, effort involved, and diversification, not purely the headline percentage.
Why compare property return against other investments at all if I already own the property?
Because continuing to hold the property is itself an active choice, not a neutral default. Every year you keep it, you're implicitly choosing it over selling and deploying that capital elsewhere, so it's worth checking periodically whether that remains the better choice rather than assuming it always will be.
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