Should You Rent or Sell?
Our Rent vs. Sell Calculator compares the potential financial outcome of holding your property as a rental versus selling it and investing the proceeds elsewhere. Enter your property details, selling costs, rental assumptions to project cash flow, equity growth, and after-fee proceeds, so you can make a clearer decision.
Property Details: Key Inputs
- Current Value: Estimated market value of your property today.
- Original Purchase Price: What you paid when you bought the property.
- Mortgage Balance: Current payoff amount on your loan.
- Mortgage Rate: Your existing interest rate (used to estimate carrying cost if you continue to own).
Rent Scenario: Income & Expenses
- Monthly Rent: Expected current rent if you lease the property.
- Vacancy Rate (%): Estimated time the property may sit empty between tenants. A
- Rent Growth Rate (YOY %): Projected annual increase in rent.
- Property Tax, Common Charges/HOA, Insurance, Maintenance: Owner expenses that reduce cash flow.
- Property Management Fee (%): If using a property manager.
- Broker Commission (%): Leasing/broker fee applied during tenant turnovers.
Sell Scenario: Costs & Proceeds
- Broker Commission (%): Total listing brokerage fee paid at closing.
- Seller Attorney (Flat): Legal fee paid by the seller.
- Transfer Tax Rate (%): Estimated transfer/recording taxes due on sale.
- Flip Tax (If Applicable): Building-imposed fee (commonly seen in co-ops; can be % of price or per share/unit).
- Capital Gains Tax Rate (%): Estimated effective rate for federal/state capital gains.
Market & Assumptions
- Property Appreciation (YOY %): Expected annual home value growth if you keep the property.
- Inflation Rate (YOY %): Used to frame purchasing power and real returns.
- Stock Market Return (YOY %): Opportunity cost benchmark—what you might earn if you sell and invest the net proceeds instead.
- Marginal Tax Rate (%): Your ordinary income tax bracket (used for high-level comparisons; see FAQ on after-tax results).
How the Calculator Compares Rent vs. Sell
If You Rent
- Income: Monthly rent adjusted for vacancy and rent growth.
- Operating Costs: Taxes, HOA/common charges, insurance, maintenance, management, utilities (if any).
- Turnovers: Vacancy loss plus brokerage/leasing fees and typical refresh costs when a new tenant is placed.
- Cash Flow: Net after expenses; mortgage payment reduces take-home cash if you have a loan.
- Equity Growth: From principal paydown and any property appreciation over time.
If You Sell
- Gross Proceeds: Sale price less broker commission, transfer taxes, flip tax (if any), and seller attorney.
- Loan Payoff: Net of remaining mortgage balance.
- Estimated Taxes: Capital gains tax applied to the taxable gain (simplified—see FAQs).
- Net Cash to You: What you could invest elsewhere (e.g., stock market return input) to compare opportunity cost.
Results: Key Metrics Defined
- Monthly Cash Flow (Rent Path): Income minus operating expenses and mortgage.
- Vacancy-Adjusted Income: Rent reduced by your vacancy rate to reflect time between leases.
- Cumulative Net Cash Flow: Total cash generated over the holding period (pre-tax estimate).
- Ending Equity (Rent Path): Modeled home value minus mortgage balance after appreciation and amortization.
- Net Proceeds (Sell Now): After commission, transfer/flip taxes, attorney fees, loan payoff, and estimated capital gains tax.
- Opportunity Cost Benchmark: What your net proceeds might grow to if invested at the stock market return input.