Sell or Rent Calculator
Compare selling a home now and investing the net proceeds with renting it out, reinvesting cash flow and selling after a chosen holding period. Currency changes formatting only; it does not convert values.
Sell or rent comparison
| Net sale proceeds today | — |
|---|---|
| Scheduled mortgage payment | — |
| Future home value | — |
| Mortgage balance at horizon | — |
| Net future sale proceeds | — |
| Nominal cumulative rental cash flow | — |
| Future value of rental cash flows | — |
| Total collected rent | — |
Should you sell your house or rent it out?
The stronger choice depends on more than monthly rent. Selling converts equity into cash that can be invested immediately. Renting keeps exposure to home-price changes, reduces the mortgage balance and creates rental cash flow, but adds vacancy, operating expenses, management and a later sale.
This sell vs rent calculator puts both choices at the same future date so they can be compared as projected wealth. It is a scenario tool, not a prediction or a recommendation to buy, sell, hold or rent property.
How the comparison works
Sell now: net sale proceeds equal current value minus selling costs and mortgage payoff. Those proceeds grow at the alternative investment return for the comparison period.
Rent, then sell: the mortgage is amortized month by month. Rent, vacancy, management, operating costs and the actual mortgage payment produce monthly cash flow. Each cash flow is carried to the horizon at the alternative investment return. The property is then sold at its projected value, less selling costs and the remaining mortgage.
Sell-now wealth = (current value − selling costs − mortgage balance) × (1 + investment return)years
Rent-then-sell wealth = future net sale proceeds + future value of monthly rental cash flows − future value of setup costs
Checked example
With a $400,000 home, $250,000 mortgage at 4.5% with 240 months remaining, $2,800 monthly rent, $900 monthly operating costs, 5% vacancy, 8% management, 3% annual rent and cost growth, 3% appreciation, 7% selling costs, a five-year horizon, 5% alternative return and $5,000 setup cost:
- The scheduled principal-and-interest payment is $1,581.62 per month.
- Selling now produces $122,000 after selling costs and mortgage payoff; invested for five years, it becomes $155,706.35.
- The projected home value after five years is $463,709.63 and the remaining mortgage is $206,749.98.
- Future net sale proceeds are $224,499.98. The future value of rental cash flows and setup cost is −$2,549.52.
- Rent-then-sell wealth is $221,950.46, which is $66,244.11 above the sell-now scenario under these assumptions.
What to include in operating costs
Include costs the owner pays: property tax, insurance, HOA, routine maintenance, a capital-repair reserve, utilities paid by the owner and other recurring expenses. Do not include the mortgage payment or percentage management fee there because the calculator handles them separately. Rental setup costs can include initial repairs, cleaning, leasing fees or other one-time costs.
Important limits
The calculator assumes a fixed-rate, fully amortizing mortgage and no refinancing, extra principal payments or adjustable rate. It does not calculate income tax, capital-gains tax, depreciation, depreciation recapture, legal compliance, transaction timing, insurance eligibility or local landlord rules. Enter after-tax or adjusted cash-flow assumptions yourself if those items matter. Market value, rent, vacancy, appreciation, expenses and investment returns can differ substantially from estimates.
Related calculators
Use the Rent vs Buy Calculator if you are deciding where to live, the Rental Property Calculator for a full investment return projection, the Cap Rate Calculator for property income and valuation, or the Net Effective Rent Calculator to compare lease concessions.