Sell vs Rent-Out Calculator
Should you sell, or keep it as a rental?
Property & taxes
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If rented
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Comparison horizon
% / yr
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At year 10
Sell it
Selling now and investing the proceeds leaves you $35,980 wealthier.
Sell now: net proceeds$238,000
Sell + invest @7% (yr 10)$468,182
Rent + sell at yr 10$432,202
Difference$-35,980
Selling ahead by
$35,980
at year 10
Net if sold today
$238,000
$600,000 − costs − tax
Year-1 rental cash flow
$-3,630
negative
Capital gains exemption
$500,000
MFJ Section 121
Break-even year
Year 1
when rent overtakes sell
Wealth over time
Sell now + invest at discount rate Hold + rent (sell at year)
| Yr | Home value | Cash flow | Sale net (rent path) | Sell+invest | Rent + sell later | Diff |
|---|---|---|---|---|---|---|
| 1 | $618,000 | $-3,630 | $259,511 | $254,660 | $255,881 | $1,221 |
| 2 | $636,540 | $-3,050 | $281,864 | $272,486 | $274,930 | $2,444 |
| 3 | $655,636 | $-2,453 | $305,089 | $291,560 | $295,217 | $3,657 |
| 4 | $675,305 | $-1,835 | $301,012 | $311,969 | $288,613 | $-23,356 |
| 5 | $695,564 | $-1,198 | $323,248 | $333,807 | $308,783 | $-25,024 |
| 6 | $716,431 | $-541 | $346,368 | $357,174 | $330,350 | $-26,824 |
| 7 | $737,924 | $138 | $370,403 | $382,176 | $353,401 | $-28,775 |
| 8 | $760,062 | $838 | $395,386 | $408,928 | $378,031 | $-30,897 |
| 9 | $782,864 | $1,561 | $421,351 | $437,553 | $404,342 | $-33,211 |
| 10 | $806,350 | $2,067 | $448,334 | $468,182 | $432,202 | $-35,980 |
Tax model details: The rental side now credits depreciation as an annual tax shield (basis × 80% / 27.5 yrs at your marginal rate) AND debits the recapture at sale (§1250, lesser of 25% or marginal). Long-term capital gains are bracketed off your marginal income tax (0% / 15% / 20%) with the 3.8% NIIT layered in for higher brackets. Cumulative rental cash flow is reinvested at the discount rate so it compares apples-to- apples with the “sell + invest” portfolio. Caveats not modeled: §469 passive-loss limits (most W-2 borrowers above ~$150k MAGI cannot use rental losses currently; they suspend), 1031 exchange option, QBI/§199A deduction for rentals that qualify, state taxes on capital gains and rental income. Section 121: 2-of-5 lookback approximated as a 3-year cliff after conversion. Always confirm with a CPA.