Sell vs Rent-Out Calculator

Should you sell, or keep it as a rental?

Compare selling your home now and investing the cash with keeping it as a rental and selling later. You’ll need your home’s value, your mortgage details, and a realistic rent.

Selling turns your equity into cash
If you sell, you get the price minus selling costs, your loan payoff, and any tax: roughly your . We assume you invest that cash and it grows at the return you choose.
Renting earns income and keeps the home
If you rent it out, the rent pays the mortgage and expenses, and what’s left is your . Meanwhile the home can gain value () and the loan shrinks. You sell later.
Taxes change once you move out
The lasts only about 3 years after you move out. A rental also earns deductions that are taxed back when you sell. We compare both paths after tax, year by year.

For rent, check listings for similar homes nearby and use a figure toward the low end. Rental tax basics explains how rental income is taxed.

Your home & taxes

Lived there?

Filing status

The home

What it's worth today and what you've put into it. Your purchase records and improvement receipts help here.

Current home value

Original purchase price

Major improvements

Years owned

Your mortgage, selling costs, and tax bracket

Your latest mortgage statement shows the balance, rate, and months left.

Mortgage balance

Mortgage rate

Months left on loan

Selling costs

Federal tax bracket

If you rent it out

Rent and the costs of being a landlord. Lean conservative: rent estimates tend to run high and costs low.

Monthly rent

Vacancy (empty time)

Property manager fee

Maintenance

% / yr

Property tax

% / yr

Landlord insurance

$/ yr

HOA dues

$/ mo

Looking ahead

How long you'd keep the rental and how you expect prices and investments to grow. These are guesses; try a few.

Years until you'd sell

Home value growth

% / yr

Rent growth

% / yr

Return if you invest instead

Better choice over 10 years

Sell it

Selling now and investing the cash leaves you $248 wealthier after tax.

Sell now: cash after payoff and tax$238,000

Sell now, invest at 7% for 10 yrs$433,655

Rent, then sell in year 10$433,407

Difference (rent minus sell)-$248

Selling ahead by

$248

after 10 years

Cash if sold today

$238,000

$600,000 minus costs, loan payoff, tax

Rental cash flow, year 1

-$3,630

you’d pay in this much a year

Tax-free home sale limit

$500,000

Section 121, married filing jointly

Renting catches up

Year 1

but selling ends ahead

What this means

Selling today would leave you about $238,000 in cash after $42,000 in selling costs, paying off your $320,000 mortgage. Invested at 7% a year, that grows to about $433,655 after tax by year 10. Keeping it as a rental costs you about $3,630 out of pocket in year one, because the rent doesn’t cover the mortgage and expenses, and selling it in year 10 would leave you about $433,407 in total. So selling comes out about $248 ahead. Because the rental would be sold after year 3, it loses the tax-free home sale exclusion that selling now keeps.

The comparison leaves out the time it takes to be a landlord, and the tool spreads repairs and empty months evenly when they usually arrive in lumps. To test the answer, try a lower rent, a lower growth rate, or a different investment return.

Wealth over time

What you’d have, after tax, if you cashed out at the end of each year on each path.

Sell now and invest the cash Keep as a rental, sell that year

Year	Home value	Cash flow (after tax)	Rental sale: cash out	Sell now + invest	Rent + sell later	Rent minus sell
1	$618,000	-$3,630	$259,511	$252,161	$255,881	$3,720
2	$636,540	-$3,050	$281,864	$267,313	$274,968	$7,655
3	$655,636	-$2,453	$305,089	$283,526	$295,328	$11,802
4	$675,305	-$1,835	$301,012	$300,874	$288,828	-$12,046
5	$695,564	-$1,198	$323,248	$319,436	$309,128	-$10,308
6	$716,431	-$541	$346,368	$339,298	$330,846	-$8,452
7	$737,924	$138	$370,403	$360,550	$354,065	-$6,484
8	$760,062	$838	$395,386	$383,289	$378,875	-$4,414
9	$782,864	$1,561	$421,351	$407,620	$405,368	-$2,252
10	$806,350	$2,067	$448,334	$433,655	$433,407	-$248

In the table, “Rental sale: cash out” is what selling the rental that year would leave after selling costs, the loan payoff, and tax. “Rent + sell later” adds the rental cash flow you’d have built up. On taxes, the rental side credits as an annual tax shield against positive rental income (lesser of basis or current value × 80% / 27.5 yrs at your marginal rate) and debits the recapture at sale (, lesser of 25% or marginal, plus NIIT where it applies). Net rental losses get no current benefit (treated as suspended). Long-term capital gains are bracketed off your marginal income tax (0% / 15% / 20%) with the 3.8% layered in for higher brackets. Cumulative rental cash flow is reinvested at the investment return, the same return the “sell + invest” portfolio earns. Both paths are shown as after-tax wealth if liquidated in that year: investment growth on each side (sale proceeds invested today, and reinvested rental cash flow) is taxed at the same long-term capital-gains rate, as the rental’s own sale gain is. This assumes a buy-and-hold portfolio with no yearly tax drag from dividends or turnover. The tool doesn’t model using rental losses under the $25k allowance ( under $150k) or releasing suspended losses at sale, the option, the for rentals that qualify, and state taxes on capital gains and rental income. Section 121: the 2-of-5 lookback is approximated as a 3-year cliff after conversion. A CPA can confirm how these rules apply to you.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

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Terms used on this page

The tax rules and rental math that decide whether selling or renting comes out ahead.

Home equity: The part of the home you own outright: its value minus what you owe. Selling turns it into cash; renting keeps it in the house.
Cost basis: What you paid for the home plus major improvements. Your taxable profit on a sale is the price, minus selling costs, minus your basis. More
Section 121 exclusion: Makes up to $250,000 of home sale profit tax-free ($500,000 married filing jointly) if you owned and lived in the home 2 of the 5 years before selling. After you move out, that window closes in about 3 years. More
Cash flow: What the rental leaves you each year after rent covers the mortgage, expenses, and tax. Negative cash flow means you pay in to keep it.
Vacancy: The share of the year a rental sits empty between tenants, earning no rent. 5% is about 18 days a year.
Depreciation: A yearly tax deduction for wear and tear on a rental’s building (not the land), spread over 27.5 years. It lowers tax while you rent, but is taxed back at up to 25% when you sell.
Depreciation recapture: The tax due at sale on the depreciation you claimed (or could have claimed) while renting. The Section 121 exclusion doesn’t cover it.
Appreciation: The rise in a home’s value over time. It’s a guess, so try a few rates to see how much the answer depends on it.
Discount rate (investment return): The yearly return you could earn by selling and investing the cash instead. It’s the yardstick the rental has to beat.
NIIT (net investment income tax): An extra 3.8% federal tax on investment income, including rental income and capital gains, for higher earners. More

Keep learning

Next steps

Seller net sheet: itemize what selling would leave you
Capital gains on a home sale: check the tax on selling now
Investment property: a deeper look at the rental’s returns
1031 exchange: put off tax when selling a rental later