Rent vs Sell Calculator
Compare the financial outcomes of renting out your property versus selling it.
Important Notice
These calculators are for educational and informational purposes only. Results are estimates based on the information you provide and should not be considered financial, tax, or investment advice. Your actual results may vary. For personalized guidance, please consult a qualified financial advisor, tax professional, or other appropriate expert.
People Also Ask
Should I sell my house or rent it out?
It depends on your goals, local market, and willingness to be a landlord. Selling provides immediate liquidity; renting preserves the asset and potential appreciation while generating income. This calculator helps compare the financial outcomes.
What expenses do landlords have?
Landlords pay mortgage, property tax, insurance, maintenance (typically 1-2% of value annually), vacancy costs (5-10%), and often property management fees (8-10% of rent). These significantly reduce net rental income.
How do capital gains taxes work when selling a home?
If you lived in the home 2+ of the last 5 years, you can exclude up to $250,000 ($500,000 married) of capital gains. Gains above the exclusion are taxed at capital gains rates - typically 15% or 20%.
What is the 1% rule for rental properties?
The 1% rule suggests monthly rent should be at least 1% of the purchase price. For a $500,000 home, that means $5,000/month rent. Most markets fall below this, especially in high-cost areas.
Is rental income taxed?
Yes, but you can deduct expenses including mortgage interest, property taxes, insurance, maintenance, depreciation, and management fees. Depreciation often creates paper losses even with positive cash flow.
What is vacancy rate?
Vacancy rate is the percentage of time your rental sits empty between tenants. Even good properties typically have 5-8% vacancy. Budget for tenant turnover, cleaning, and marketing time.