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Rent or Sell My House Calculator
Moving out and not sure whether to sell or become a landlord? Compare selling now and investing the cash with renting the home out and selling later, including cash flow, loan paydown, appreciation, depreciation and the home-sale tax exclusion.
Last updated:
Your home today
$
$
%
years
$
What you paid plus capital improvements.
%
Agent commission, closing costs, prep.
If you rent it out
$/ mo
%
% of rent
% of value / yr
$/ yr
$/ yr
$/ mo
% / yr
% / yr
% / yr
Taxes & alternative
% / yr
After-tax return you expect on the proceeds.
%
%
Your marginal income tax rate.
%
Land isn't depreciable.
Enter your values to see the result.
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How to use the Rent or Sell My House Calculator
- Enter today's value, mortgage balance, rate, years left, cost basis and selling costs.
- Enter the expected rent and rental expenses: vacancy, management, repairs, taxes and insurance.
- Set growth rates for rent, expenses and home value, plus the return you'd earn on the sale proceeds.
- Add tax details: capital gains and income tax rates and your home-sale exclusion.
- Compare to see which option leaves you with more wealth after the chosen number of years.
How the two scenarios are compared
- Sell now: net proceeds = value − selling costs − loan balance − capital gains tax (after any exclusion); then proceeds × (1 + return)years.
- Rent out: yearly cash flow = rent × (1 − vacancy) − management − taxes − insurance − HOA − maintenance − mortgage payments − income tax.
- Rental income tax = (collected rent − operating expenses − mortgage interest − depreciation) × your tax rate, when positive.
- Depreciation = lower of basis or market value × building share ÷ 27.5 years.
- Later sale = future value − selling costs − remaining loan − recapture tax (up to 25%) − capital gains tax.
- Rent-out total = later sale proceeds + reinvested cash flow. The scenario with the larger total wins.
What usually tips the decision
| Factor | Favors renting out | Favors selling |
|---|---|---|
| Mortgage rate | Low locked-in rate | High rate, large payment |
| Cash flow | Rent covers all costs | You'd pay in every month |
| Gain on the home | Small gain, exclusion not needed | Large gain you can exclude now |
| Local market | Strong rent and price growth | Flat prices, high vacancy |
| Your situation | Willing to manage or pay a manager | Need the cash for the next home |
Before you decide
- Get a landlord insurance quote; it usually costs more than a homeowner policy.
- Check whether your mortgage, HOA and city allow renting the home out.
- Budget for turnover: cleaning, repairs and a month or so without rent between tenants.
- If you might sell within three years, note the exclusion deadline on your calendar.
Frequently asked questions
Is it better to rent out or sell my house?
It depends on the numbers. Renting tends to win when rent covers the costs, you have a low mortgage rate, and the home appreciates well. Selling tends to win when cash flow is negative, the property needs work, or you can invest the proceeds at a good return. This calculator compares the total wealth from both paths after the same number of years.
How is the comparison calculated?
Selling now: sale price − selling costs − mortgage payoff − tax, then grown at your investment return. Renting: each year's after-tax cash flow is reinvested at the same return, and the home is sold at the end of the period at its appreciated value, minus selling costs, the remaining loan and tax. The two totals are compared year by year.
Will I lose the $250,000 / $500,000 home-sale exclusion if I rent my house out?
Under the US rule you must have owned and lived in the home for at least 2 of the 5 years before the sale. If you lived there 2 years and then rent it out, you generally keep the exclusion if you sell within about 3 years of moving out. After that, the full gain becomes taxable. The calculator applies this window automatically.
What is depreciation recapture?
Rental homes can be depreciated over 27.5 years (building only, not land), which lowers taxable rental income. When you sell, the depreciation taken is taxed as unrecaptured Section 1250 gain at up to 25%, and it is not covered by the home-sale exclusion. The calculator adds this tax to the later sale.
What basis is used for depreciation when a home becomes a rental?
When a personal home is converted to a rental, the depreciable basis is the lower of your adjusted basis or the fair market value on the conversion date, times the building's share of the value. The calculator uses that rule with the building share you enter.
What does the calculator leave out?
It does not model state taxes, passive loss limits, the cost of preparing the home for tenants, capital gains tax on your investment returns, or refinancing. Losses on the rental are not used to reduce other income. Treat it as a planning estimate and check details with a tax professional.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.
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