This started as a yield question and it is not one. Echo Pt is the only property the family holds that does not depend on Cindy Donley for its water.
Keep it, and let both buildings. On the numbers alone that is now the better outcome by $837 a month before appreciation. But the numbers are not why.
Cedar Creek's water comes through Cindy. She has already begun sending raw water in place of clean, and in April 2028 she finishes paying the note and holds every card. Central Texas is not getting wetter. Echo Pt is the fallback, and at $2,900 a month gross the fallback pays for itself instead of costing you. You do not sell your exit while the person controlling your water is degrading it.
Cash in your pocket each month, after every cost that actually gets paid.
the house at $2,100 and the shop at $800, both let long-term; tenants pay the utilities
Work: Low to moderate — two tenancies instead of one, still a manager's job.
$2,100 a month is Nancy Bergeron's figure for this house, not a market average; tenant pays the utilities
Work: Low — a manager handles it; you approve repairs.
331,200 in insured savings at 4.15%, plus 322/mo of Arkansas utilities you stop paying
Work: None. Done at closing.
a block off the water, so the Hot Springs market rate applies: $258/night at 36.5% occupancy, about $30,400 a year gross
Work: High, and it is a business — guests, cleaners, reviews, seasonality, 480 miles away.
Letting the house at $2,100 — the figure from Nancy Bergeron, Keller Williams / The Bergeron Group, the agent handling the listing — and the shop at $800 beats selling on cash by $837 a month before the house appreciates a dollar. Then add roughly $900 a month of appreciation at 3% a year.
The earlier version of this page assumed $1,200 rent and no shop income at all, and on those numbers selling won comfortably. It no longer does. The $2,100 is Nancy Bergeron, Keller Williams / The Bergeron Group's assessment of this specific house, and she has no reason to talk up a rent when she is engaged to sell it.
Nancy does not do rentals. She gave the $2,100 as an opinion; she will not list it, will not manage it, and will not put it in writing. So the entire rent case rests on a figure nobody has skin in, for a property 480 miles away, with a manager who does not yet exist.
That does not make $2,100 wrong — she knows the market and the house. It means it is untested, and the two lines that depend on it are the two that decide this: the rent itself, and the 10% management fee for a person nobody has found.
Watch the first-year cost too. Most small-market managers charge 10% ongoing plus a leasing fee of about one month's rent per placement. Two tenancies means two of those — roughly $2,900 in year one, or about $242 a month, which takes the first year down to around $2,062 and closer to the sell line than the table above suggests.
Nancy will not stand behind the rent, so somebody else has to. Ring two or three property managers in Hot Springs and ask one question: what will you let the house and the shop for, and will you take them on? A manager quoting rents is quoting their own fee, so they have every reason to be realistic rather than flattering.
This is no longer the decision — the water is. It is the sizing. If the answer comes back near $2,900, the fallback pays for itself. If it comes back materially lower, you keep Echo Pt anyway and accept it costs you something. Keeping a place to go is worth paying for; the rent only decides how much.
The monthly figures answer "which pays more this month". This answers where the family stands in 2036, which is the question that matters.
Both paths have to cover the same household gap from April 2028. On the sell side the cash pile is drawn down to plug it. So on the keep side the rent is consumed the same way — only a genuine surplus accumulates. An earlier version of this table banked the rent as savings while making the cash pay the bills, which flattered keeping by roughly $300,000 and was not a comparison at all.
Assumes 3% appreciation, 3% rent growth, 3.92% on savings, and 8% costs whenever the house is eventually sold. Change any of those and the gap changes; the direction does not.
| Year | Cash left, if sold | Rent that year | House value | Worth, if kept | Difference |
|---|---|---|---|---|---|
| 2026 | $344,183 | $27,648 | $370,800 | $368,784 | +$24,601 |
| 2027 | $357,675 | $28,477 | $381,924 | $407,496 | +$49,821 |
| 2028 cliff | $326,552 | $29,332 | $393,382 | $402,224 | +$75,673 |
| 2029 | $294,209 | $30,212 | $405,183 | $398,149 | +$103,941 |
| 2030 | $260,598 | $31,118 | $417,339 | $395,307 | +$134,709 |
| 2031 | $225,669 | $32,052 | $429,859 | $395,470 | +$169,801 |
| 2032 | $189,371 | $33,013 | $442,755 | $407,334 | +$217,963 |
| 2033 | $151,651 | $34,004 | $456,037 | $419,554 | +$267,904 |
| 2034 | $112,451 | $35,024 | $469,718 | $432,141 | +$319,689 |
| 2035 | $71,716 | $36,074 | $483,810 | $445,105 | +$373,390 |
Selling peaks in 2027 at $357,675 and then falls every year as the cliff is paid for out of capital — down to $71,716 by 2035 and gone shortly after. Keeping ends the decade with a house worth $483,810 and an income that has grown, not shrunk. Keeping is ahead in every single year, and the gap compounds.
Below about $1,827 of combined gross rent, selling is the better outcome on cash. The expected $2,900 could fall by 37% and the decision would still hold. That is a wide margin for a number nobody has confirmed yet — which is exactly why it is worth knowing.
| Approach | Covers | For how long |
|---|---|---|
| Sell, and build the Treasury ladder | 100% | Five years — dry by 2033 |
| Keep, and let both buildings | 61% | Indefinitely, and rising with rents |
The rent leaves $1,458 a month still to find, against a cutting plan where $5,144 a month has already been identified. The ladder covers all of it and then stops. A partial answer that does not expire beats a complete one that does.
Paul is 81. Dot is 80. A ten-year table runs to 91 and 90, so the back half of it is a table about the heirs, not about them. Two things follow, and they pull opposite ways.
I wrote that letting for three years destroys the $500,000 capital-gains exclusion. That is true, and at 81 and 80 it matters far less than it would at 60.
Property held until death passes to heirs with a stepped-up basis — the cost basis resets to market value on the date of death, and the gain accumulated over a lifetime is simply never taxed. If Echo Pt is not sold in their lifetime, the exclusion they would forfeit by letting is an exclusion they would never have needed.
Depreciation recapture works the same way — it dies with the owner. So the tax case for selling quickly, which looked like the one hard deadline on this page, mostly dissolves at these ages. Confirm with the accountant; do not act on my reading of it.
The case for keeping Echo Pt is that it is somewhere to go if Cindy makes Cedar Creek untenable. That argument only works if the move is one you would really make.
At 83, in the middle of a water dispute, would you and Dot actually relocate 480 miles to Arkansas — away from the doctors you know, the people who help, and the property that produces most of the household income? Or is the real answer to a failing water supply somewhere closer, smaller, and near care?
If you would genuinely move there, keep it. It is insurance and it pays for
itself.
If you would not, then it is not insurance — it is a rental property in another
state, and it should be judged only on the $837
a month it earns over selling, against the work of holding it.
That is not a question arithmetic can settle, and it is the one that matters most. Worth answering with Dot before the managers call back.
The thing that decides it is 480 miles from Echo Pt, at the other property.
Cedar Creek's road and water both run through Cindy Donley, and Paul pays her $2,500 a year for "road, water and ground lease." She has already started sending raw, dirty water in place of the clean supply — after being given a purification system — which has to be cleaned up at this end.
In April 2028 she makes her last note payment and the balloon clears. From that day she owes nothing, Paul holds no lien, and whatever leverage came from being her creditor is gone. That is the same month the $3,969.50 of income stops. The income cliff and the control cliff are the same date.
There is already a documented pattern: the money file flags about $11,935 potentially recoverable from her, including $2,100 of well fees that should have halved after the 2019 foreclosure and roughly $1,000 a year of apparent overpayment on road and water.
Everything above turns on one distinction. A recorded easement runs with the land and survives her paying off, selling, or dying. A lease is something she can end. Four Bastrop County instruments decide which one you hold:
| 201804654 | Easement 1 — the 30-foot access road |
| 201804655 | Easement 2 — the 0.107 acre |
| 201804656 | Agreement, Walhus to Pope |
| 201804659 | One of 656 / 659 is the Shared Water Well Use Agreement |
If the water is a recorded easement, she cannot cut it off and sending dirty water may already be a breach. If it is only a lease, there is a real problem and about twenty months to fix it.
The timing has changed. The legal plan schedules "easement and well confirmations" for after Echo Pt closes, paid from proceeds. If Echo Pt is not sold there are no proceeds — and leverage is highest now, while she still owes $120,505, not in 2028 when she owes nothing and holds the tap. The $350–500 property consultation should happen in the next fortnight, from cash.
The Arkansas utilities stop either way — Entergy Arkansas (electric) $120, City of Hot Springs (water) $76, Summit Utilities (gas) $126, $322 a month in total. That is already added to every option above, so it does not tip the decision one way or the other. If you let the property, tenants pay them; if you sell, they are somebody else's bills.
$1,737 a month is serious money and the case is now strong. Three things sit outside the arithmetic and only you can price them.
It is 480 miles away. A manager handles the ordinary. The extraordinary — a burst pipe, a bad tenant, a hail claim — still lands on you, in another state, while running the units here. This argument is weaker than it was a week ago: there is now an on-site manager at Cedar Creek, which is exactly the capacity that was missing.
April 2028 wants liquidity. When the note stops you lose $3,969.50 a month. A house takes ninety days to convert; the ladder pays out the month you need it. Renting means funding the ladder from somewhere else, or not funding it at all.
The $900 is not spendable. Appreciation is real but you cannot eat it, and realising it means selling the house later — paying the 8% costs then instead of now, into a market nobody can forecast.
| Property tax (AR, est.) | $150 |
| Insurance (landlord policy) | $130 |
| Repairs & vacancy allowance (12%) | $348 |
| Property management (10%) | $290 |
| Monthly, off $2,900 gross | $918 |
| Cleaning & turnovers | $420 |
| Utilities, internet, supplies | $380 |
| STR insurance & permits | $180 |
| Property tax (AR, est.) | $150 |
| Repairs & furnishing wear | $260 |
| Co-host / management (20%) | $507 |
| Platform fee (3%) | $76 |
| Monthly, off $2,534 gross | $1,973 |
The Airbnb figure uses $258 a night at 36.5% occupancy because Echo Pt is a block off the water. Actual waterfront there runs $362. That single correction is the difference between a forecast and a fantasy.
In April 2028 the note makes its last payment and $3,969.50 a month stops. It does not taper. This is what the proceeds would have done about it — and it is the real cost of keeping the house, because if you keep Echo Pt, this does not get funded. The cliff still arrives; the answer to it has to come from somewhere else.
The note pays $3,969.50/mo, but you pay Cindy $208/mo back for road, water and ground lease — and that obligation ends with the note. The real gap is $3,762/mo, or $45,138 a year. Building the ladder off the headline figure would overbuy by about $30,000.
| Matures | Covers | Costs today | Pays out | |
|---|---|---|---|---|
| 1 | April 2028 | May 2028 – Apr 2029 | $42,326 | $45,138 |
| 2 | April 2029 | May 2029 – Apr 2030 | $40,731 | $45,138 |
| 3 | April 2030 | May 2030 – Apr 2031 | $39,195 | $45,138 |
| 4 | April 2031 | May 2031 – Apr 2032 | $37,718 | $45,138 |
| 5 | April 2032 | May 2032 – Apr 2033 | $36,292 | $45,138 |
| Five rungs | $196,262 | $225,690 | ||
Interest does $29,428 of the work, because money set aside now has nearly two years to compound before the first rung is needed. Assumes 3.92% Treasuries.
The $41,115 balloon lands in April 2028 — the same month the payments stop. It is not a windfall to spend; it is most of the first rung. Subtract it and the ladder costs you $155,147 out of pocket today, not $196,262.
| When | Arriving | |
|---|---|---|
| Aug 2026 | Now — note still paying | $3,762/mo |
| Apr 2028 | Last note payment | $3,762/mo |
| May 2028 | First month without it | $3,762/mo |
| May 2030 | Two years on | $3,762/mo |
| May 2032 | Ladder's final year | $3,762/mo |
| May 2033 | Ladder exhausted | nothing |
Blue is the note. Green is the ladder. The point of the exercise is that the line does not move in April 2028 — it holds flat at $3,762 a month until 2033, by which time you have had seven years to decide what comes next.
This is arithmetic, not financial advice, and I am not licensed to give any. The bucket logic is sound and the rates are named so you can change them. Before moving $331,200, run it past a fee-only fiduciary — someone paid by the hour rather than by what they sell you. One session on a sum this size is cheap insurance.
FDIC covers $250,000 per depositor per bank, so $331,200 in one savings account leaves about $81,200 uninsured. Treasuries sidestep the limit entirely — they are direct government obligations, not bank deposits.