Okay, so I just use trap GBT to determine my one investment property if I should sell it or if I should keep it renting, right? So I literally ask it, what is the better investment between these two options? And I said, I sell my health for 165 k, which is currently has 128 k mortgage on it and invest the difference, which is like 30 k where I’ll be making 9% return annually, right? And then I said, or I keep the house, which has a mortgage on it for $855 a month with rent, that’s around 17, with a net of 345 k or $345 where the appreciation grows 5K every year, right? So these are the numbers that I know. So, you know, it goes through and it’s like, okay, I’m gonna start evaluating all this difference.
What I loved is like, I completely forgot about closing cost. So it’s like, yeah, you’re actually gonna make like 30 k and not this, whatever. Then I went on renting it all out. I broke it down into option 1, so the Hells invest the difference.
Option 2, keep the house and rent it out. And like it says, like potentially option 2 offers a higher return compared to option 1. However, it carries more risk, which was like property management, you know, all the rest and sort of associate with being a landlord. Cool. Right? So we didn’t calculate my expenses, right? It didn’t catch that up. So I said, please recalculate with 345 per month after expenses. So I did the difference. Still, option 2 is still better with the annual return of around $9,000. So I said recalculate option 2 with the annual appreciation of 3K. Cuz I think I was just being, you know, that’s what I would like it to be, but maybe it’s not. So recalculated again and again, option 2 still nets out better at around like 7 k.
So then I was like, what is the appreciation rate in mandatory? And of course, it’s like, it couldn’t find that information. Next thing for chat GBT to do. So then I found that it was a 7% month or a month it’s been growing 7%, right? So I said, okay, recalculate with a 7% month over month for the next two years, right? So I did that and it comes out at like 377,000.
I was like, this doesn’t make sense in the math. I was like, recalculate at 7% annually. So we did that, right? And it says, okay, if I do the two options, I will now net out like around $27,000, right? So I said, we calculate option one with 9% compounding interest for two years. And I went through all of this and it said, okay, with those two differences, option 1 selling actually outperforms option 2 added to your return.
So I said, okay, what’s realistic? I’m gonna probably hold it for five years, right? I’m not gonna move the money around that will invest or I’m not gonna do anything with the house. So recalculate both on a five year return.
So it went through all the different options. It did all the math, boom. Option one, if I were to sell today and invest at 9% compounding interest, in 5 years, I will have around $46,000. If I keep the house, keep it renting, let it appreciate, I will have a future value of $224,000, right? Insane.
That just literally made me decide what I’m gonna do with this. Okay, so then I was like, what if I wanna sell in the next five years, right? Capital gains. I did. You know, I said, what if I make 100 k a year about the house at 42 k, what is the capital gain? So it kind of did a theoretical 20%. I was like, capital gains is 50%. So I went in and did all the math. And so it says, after pain all the capital gains, I’ll still have a net of $133,000 if that’s, if I’m I five paid off my mortgage. So a little exercise that I did this morning, like, I don’t know, maybe I did this for about half an hour, calculating rates and all that stuff. And after going through this exercise, it’s like, this is how people make money and get rich in real estate. They buy, they hold, they rent it out, they let it appreciate. And then after, you know, five, 10,15 years, maybe they’ll sell. But at that rate, they’re now Cash Floyd way more than they actually started. So as much as I really don’t want to have the house cuz I don’t like being a landlord and I don’t like, you know, all the risks that are associated with the annual returns I will make are worth it. It’s honestly worth it. So that was me using Chat GBT this morning to determine what my future investment should be on this one property.