Rent vs Sell Calculator

An owner decision rather than tenant rent versus buy

Begin with the current property’s entered sale value and a loan payoff amount appropriate for a sale today. Selling costs and the entered current-sale tax reduce the cash available to invest. The comparison starts from an already owned asset, so it does not subtract the original purchase price again when calculating the two future owner outcomes.

The holding path rents out the property for a whole number of years and then sells it at the end of that horizon. It uses the same property-value growth assumption throughout. This tool does not compare renting your next home with buying it, estimate replacement housing costs, or decide whether local rules allow you to rent the existing property.

Enter annual rental operations and debt separately

Year-one scheduled rent is reduced for vacancy, then annual operating costs, an entered rental income-tax amount, and the entered annual debt payment are deducted. Rent and the tax amount follow income growth; operating costs follow expense growth. The annual debt payment stays constant through the modeled period. Set the horizon and payment assumptions to match the scenario you are testing.

The mortgage balance expected at the final sale is a separate input. It is not inferred from the annual debt payment, because rates, payment schedules, refinancing, and principal reductions can differ. Get both payoffs and the debt-service amount from a consistent loan schedule. This version does not automatically stop payments when a loan would mature or amortize.

Invest net proceeds and accumulate rental cash flows

The sale-now alternative invests net cash after today’s sale costs, current debt payoff, and entered tax. The effective annual return must already include the fees and investment taxes you want to represent. That same rate accumulates each year-end rental cash flow until the final date. Signed negative flows remain an opportunity cost rather than disappearing from the comparison.

If a sale today needs additional cash because costs and debt exceed proceeds, the calculator preserves the negative net proceeds and displays the shortfall. It leaves the sale-investment balance and comparison difference undefined. Investing a negative balance would create a misleading alternative; resolving that funding gap requires a separate cash-contribution scenario.

A two-year keep versus sell example

Assume a $100,000 property, $40,000 current payoff, $30,000 payoff after two years, $12,000 annual rent, $2,000 annual operating costs, and $6,000 annual debt payments. Use no vacancy, growth, sale costs, or taxes, and an illustrative 10% net alternative return. Selling now leaves $60,000, which becomes $72,600 at the horizon.

Keeping produces $4,000 rental cash each year. The first flow grows to $4,400 and the second remains $4,000. A sale after two years yields $70,000 after the entered future payoff, so holding wealth is $78,400. The difference is $5,800. Loan principal reduction is already reflected in the future payoff; adding it again would count it twice.

Manual taxes and dated interpretation

Methodology reviewed October 1, 2026. Rental income and sale taxation can depend on use, adjusted basis, depreciation, holding period, and individual circumstances. This comparison therefore accepts tax amounts for the current sale, rental income, and final sale rather than deciding exemptions or applying a flat tax rate to debt-adjusted proceeds.

Use the separate rental-income and capital-gains tools only where their published scopes fit your situation, then transfer the relevant tax amount once. A larger ending balance means more nominal capital under the entered scenario. It does not evaluate investment volatility, sale timing, property management work, tenant obligations, or the suitability of either choice. Change one assumption at a time to identify what drives the difference.

Rent vs Sell Calculator FAQ