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Long-Term Rentals06 · Wealth & Exit

What your equity is earning, and what it costs to move it.

A long hold is a series of decisions nobody remembers making. This discipline measures what the property is actually returning, prices the exit before you choose one, and then works the three decisions that follow. Nine guides, in the order they depend on each other.

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Start here · The framing guide

Return on Equity & the Wealth Engines

A rental builds wealth through several engines running at once, and most owners never separate them. This names the ones that genuinely create economic value, separates them from the ones that only change how the results accumulate, and shows why return on equity asks a different question from cash-on-cash.

Matt Nunn · 13 min read

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What it covers

  • Net worth, liquidity and income are three different things
  • The engines that genuinely create economic value
  • Why leverage and tax timing are not engines
  • The capital base return on equity measures against
The curriculum

The guides, in dependency order.

Basis first, because everything at a sale is measured from it. Then what a sale actually costs once the pieces land in the same year, then the route that defers the gain instead of paying it.

  1. Basis

    The number every exit is measured from, and what the depreciation taken along the way turns that gain into.

  2. What a sale actually costs

    The pieces taught separately all land in the same tax year. This is where they are assembled.

  3. Deferring instead

    The route that moves the gain rather than paying it, and what it costs to take.

Decision guides

When there is a real choice.

Judgement calls, not how-tos. Each one weighs the options against your position and the cost of acting, rather than answering for you.

  1. Decision

    Sell, 1031, or Refinance?

    What each route does to your ownership, tax, cash, leverage and calendar — including the fourth one usually left off the list. It compares; it does not recommend.

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  2. Decision

    Does This Property Still Deserve My Capital?

    Not-selling is a default; keeping is a decision. A periodic diagnosis of one property, deliberately separate from whether to act on it.

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  3. Decision

    Am I Ready to Buy the Next Property?

    Whether your position can carry another rental — read across four dimensions at once, not scored. Whether the deal is any good is a different question.

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