Which Path to Financial Independence Is Faster? Sell or Rent?

What It Covers

Alyssa and John evaluate whether to sell their Connecticut primary residence with a 2.5% mortgage or convert it to a rental property when relocating to Florida next year.

Key Questions Answered

• •Military pension advantage: John's military disability pay, reserve pay, and future pension at age 60 create fixed income streams totaling approximately $30,000 annually, covering significant expenses without active work required.
• •Real estate cash flow reality: Their three rental properties generate only $12,000 annually in cash flow against $1.9 million net worth, representing less than 10% of total assets with minimal impact on $290,000 household income.
• •Tax-free capital gains window: Selling the primary residence within two years of moving preserves the capital gains exclusion on approximately $200,000 in equity, which disappears if converted to long-term rental property beyond that timeframe.
• •Lifestyle optimization over math: Despite potential rental income of $4,200 monthly, eliminating property management stress and mortgage payments creates greater flexibility than mathematically optimal returns when already achieving financial independence with $1 million in retirement accounts.