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Rent vs Sell Calculator

Compare net proceeds from selling now versus renting for a period and selling later with appreciation.

Results

Net if sold today
$141,500
Monthly cash flow while renting
$1,860
Annual cash flow while renting
$22,320
Estimated value after hold
$463,500
Net after renting then selling
$174,215
Rent-then-sell vs sell-now difference
$32,715

How to use this calculator

  1. Enter your current home value or likely sale price and the remaining loan balance on the property.
  2. Estimate selling costs as a percentage of the sale price (agent commissions, closing costs, staging, etc.).
  3. Enter your cost basis (roughly what you paid plus major capital improvements) and a flat capital gains tax rate for any taxable gain.
  4. Add rental assumptions: expected monthly rent, a vacancy allowance percentage, monthly operating expenses, and a maintenance reserve.
  5. Choose an annual appreciation rate and how many years you might hold the property as a rental before selling.
  6. Review the net proceeds if you sell today versus the projected net after renting and selling later, including the rent-then-sell advantage or disadvantage.
  7. Experiment with different hold periods, rent levels, and appreciation rates to see how sensitive the decision is to your assumptions.

Inputs explained

Home value / sale price
Your best estimate of what the property would sell for today. You can use a recent appraisal, CMA, or your target list price.
Selling costs
Total selling costs as a percent of the sale price, including agent commissions, closing costs, and expected prep expenses. Many sellers use 7–10% as a rough range.
Current loan balance
How much you still owe on the mortgage. This is subtracted from sale proceeds in both the sell-now and future-sale scenarios.
Cost basis
Rough original purchase price plus major capital improvements (not general repairs). This is used to estimate capital gains in a simplified way.
Capital gains tax rate
A flat rate used to approximate capital gains tax on the property’s gain. In reality, your actual tax rate depends on filing status, holding period, and exclusions.
Monthly rent
Expected monthly rent if you convert the property to a rental. Use conservative numbers or local comps to avoid overestimating income.
Vacancy allowance
Percentage of rent you expect to lose to vacancies and non-payment over the year (for example, 5% for relatively stable markets).
Operating expenses (monthly)
Ongoing monthly landlord costs such as property management fees, utilities you pay, HOA dues, landlord insurance, and property taxes if not escrowed in a mortgage payment.
Maintenance reserve (monthly)
A monthly set-aside for repairs and capital expenditures (roofs, HVAC, appliances). Many investors use 5–10% of rent as a rule of thumb.
Annual appreciation
Your assumption for how quickly the property’s value grows each year as a percentage. This is purely an estimate and can be positive, flat, or even negative in some markets.
Hold period (years)
How long you plan to keep the property as a rental before selling. The calculator uses this to project total rental cash flow and future sale value.

How it works

Sell-now net proceeds start with your current sale price, then subtract estimated selling costs (agent commissions, closing costs), pay off your remaining loan balance, and apply a simple capital gains tax on the gain above your cost basis.

The rent path estimates monthly cash flow as effective rent after vacancy minus ongoing operating expenses and a maintenance reserve, then annualizes that cash flow over the hold period.

We also grow the property’s value over the hold period using your annual appreciation assumption, then simulate a future sale with the same style of selling costs, loan payoff, and capital gains tax.

Total rent-then-sell outcome equals rental cash flow over the hold period plus net proceeds from the future sale.

The difference metric shows how much better (or worse) the rent-then-sell path looks compared with selling today, based on these simplified assumptions.

Formula

Sell-now net = Sale price − (Sale price × Selling cost %) − Loan balance − (Capital gains tax % × max(0, Sale price − Selling costs − Cost basis))\n\nMonthly rental cash flow = (Rent × (1 − Vacancy %)) − Operating expenses − Maintenance reserve\nAnnual rental cash flow = Monthly cash flow × 12\n\nFuture home value = Current home value × (1 + Appreciation %)^(Hold years)\nFuture net after sale = Future value − (Future value × Selling cost %) − Loan balance − (Capital gains tax % × max(0, Future value − Selling costs − Cost basis))\n\nTotal rent path net = Future net after sale + (Annual rental cash flow × Hold years)\nDifference = Total rent path net − Sell-now net

When to use it

  • Deciding whether to keep your current home as a rental when you move versus selling it to free up equity.
  • Comparing long-term outcomes when downsizing: sell the old place now or rent it for a few years and then sell.
  • Evaluating the trade-off between becoming an accidental landlord and taking a clean exit with simpler finances.
  • Testing how changes in rent, expenses, or appreciation assumptions affect the rent-vs-sell decision.
  • Helping partners or family members visualize the financial pros and cons of renting vs selling instead of arguing based on gut feel.

Tips & cautions

  • Be conservative with appreciation and rent assumptions; over-optimistic forecasts can make renting look better on paper than it will feel in real life.
  • Include realistic maintenance and capex reserves—landlords often underestimate surprise costs like roofs, HVAC, or major plumbing issues.
  • Remember that rental income may be taxable and that you might be able to deduct depreciation, which this simplified tool does not fully model.
  • Consider your time and stress level; even if rent-then-sell looks slightly better numerically, being a landlord may not fit your lifestyle.
  • Pair this with a mortgage payment calculator to see how paying down debt or refinancing changes the rent-vs-sell comparison.
  • Simplified taxes: ignores depreciation/recapture and Section 121 exclusion nuances; uses flat capital gains rate.
  • No time value of money; does not discount future cash flows.
  • Assumes static expenses and vacancy; ignores rent growth and capex spikes.

Worked examples

Modest cash-flow rental with steady appreciation

  • Assume a $450,000 home, $250,000 loan balance, 8% selling costs, $3,000 monthly rent, 5% vacancy, $500 expenses, $300 maintenance, 3% appreciation, and a 3-year hold.
  • The calculator estimates sell-now net proceeds after costs, payoff, and simple capital gains tax.
  • It then projects rental cash flow for 3 years plus a future sale at the appreciated value.
  • If the rent-then-sell net is higher, it suggests keeping the property as a rental could pay off under these assumptions.

Negative cash-flow rental in a flat market

  • Assume the same home but lower rent, higher expenses, or a lower appreciation rate (for example, 0%).
  • Monthly and annual cash flow may turn negative, and the future value may not grow enough to compensate.
  • In this scenario, the difference metric may show that selling now leaves you better off financially than renting.

Deep dive

Use this rent vs sell calculator to compare selling your home today with renting it out and selling later, using simple cash-flow and appreciation assumptions.

Enter your home value, mortgage balance, selling costs, rent, expenses, and expected appreciation to see which path may leave you with more money.

Ideal for accidental landlords, move-up buyers, and investors deciding whether to keep or cash out of a property.

FAQs

Does this include depreciation and recapture tax?
No. This tool uses a simple capital gains tax rate and does not explicitly model depreciation, depreciation recapture, or detailed Section 121 exclusion rules. Those can materially change your tax outcome.
Can I model rent increases over time?
Not directly. The calculator assumes a steady average rent, vacancy, and expense level over the hold period. If you expect rent growth, you can approximate it by inputting an average rent that reflects your expectations.
Does it adjust for the time value of money?
No. Future cash flows and sale proceeds are not discounted back to present value. For more advanced analysis you may want to use a discounted cash flow (DCF) model.
Should I decide purely based on these numbers?
No. This calculator is a planning aid, not a complete decision engine. Consider risk tolerance, local market conditions, your time and stress levels, and advice from real-estate and tax professionals before choosing a path.

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This rent vs sell calculator is for general education and scenario planning only. It uses simplified assumptions for taxes, appreciation, expenses, and vacancy and does not replace advice from a real-estate agent, tax professional, or financial planner. Always confirm details with qualified professionals before deciding whether to keep or sell a property.