315 N. Demanade Boulevard

Lafayette, Louisiana 70503

Listing Link

Keep It, Sell It, or SPY It

A paid-off house vs the S&P 500 · Shelby Youtsas

Dial the Assumptions

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Annual NOI
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Cap Rate
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Total Return on Equity
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Monthly Cash Flow

Three Paths on the New House

A — Sell & Roll (Low Note)

Down (all proceeds in)—
Loan—
P&I note—
Income offset—
Net monthly—
Equity earns0%

B — Sell: Half S&P, Half Down

Down (half proceeds, after costs)—
Loan—
P&I note—
S&P draw (4% rule)—
Net monthly—
Equity earns—

Income shown is a 4% sustainable withdrawal so the portfolio keeps compounding. Spending the full average return each month means selling shares and giving up the growth this whole comparison is built on.

C — Keep as Rental (The Pitch)

Down (from savings)—
Loan—
P&I note—
Tenant covers—
Net monthly—
Equity earns—

The Equity Duel — 10-Year Race

Sell → S&P 500 (net of 7% selling costs)

Keep the house (value + rents reinvested)

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Rental path = house value appreciating + NOI reinvested at the S&P rate. Pre-tax on both sides — see The Tax Angle below for why the sides aren't taxed the same. Educational comparison, not investment or tax advice.

The Tax Angle (Read This Part)

  • Selling now is tax-free. Because y'all lived in the house 2 of the last 5 years, up to $500k of gain (married filing jointly) is excluded under Section 121. The check at closing is the only fully tax-free money anywhere in this comparison.
  • That tax-free window doesn't slam shut when you move. It survives roughly 3 more years after move-out. Translation: you can rent the house for 2–3 years, find out whether you actually like being landlords, and still sell tax-free if you don't. Renting is reversible. Selling is not. That option is worth real money and it never shows up on the chart.
  • The S&P path is not tax-free going forward. Dividends are taxed every year and gains are taxed when you sell. The red line above is a pre-tax line.
  • The rental path has a tax shield, with a catch. Depreciation shelters a chunk of the rental income each year. The catch: if you keep it past the ~3-year window and sell later, the gain becomes taxable and the IRS recaptures that depreciation at up to 25% — though a 1031 exchange can keep deferring it.
  • Louisiana landlord reality. The day it converts to a rental, the homestead exemption goes away (property taxes step up) and the homeowner policy becomes a landlord policy. Both are already baked into the taxes + insurance number above — that's why it looks high.

I'm your Realtor, not your CPA — before pulling the trigger on any of these paths, run the tax side past a CPA. I'll happily join that call.