Rent vs. Sell Home Calculator

How it works

This is the question you face when you already own a house and you are leaving it: put it on the market, or hand the keys to a tenant and become a landlord. It is not the rent-versus-buy question a would-be buyer asks, because you own the place already. Your real comparison is between clean cash in hand today and a slower, messier return spread over years. Selling is one subtraction. Renting is a monthly trickle plus the principal your tenants quietly retire, and it still ends in a sale eventually, just later:

• Sell now — the home’s value, minus the mortgage balance, minus selling costs
• R — the monthly rent you could realistically charge
• P — your monthly mortgage payment, principal and interest only
• C — monthly property tax, insurance, and maintenance
• V — a vacancy allowance, 8% of the rent, for the months nobody is paying
• Y — the years you would keep it rented before selling
• D — the mortgage principal your tenants pay down over those years

With the defaults, selling today nets $400,000 minus the $220,000 mortgage minus $28,000 of selling costs, or $152,000 in hand. Renting it out collects $2,400 against $1,450 of mortgage, $650 of tax, insurance and upkeep, and a $192 vacancy allowance: $108 a month, or $6,480 over five years. Add the $24,417 of principal your tenants retire in that time and renting then selling lands at $182,897, about $30,897 ahead. Notice where the sell figure sits. It is inside the rent total, because renting ends in a sale too.

✓ Every result is checked against independent reference math. See how we test the calculators →

A worked example: renting out a $400,000 house instead of selling it

You are moving out of a house worth $400,000 with $220,000 left on the mortgage. Sell it today and, after the loan and 7% of selling costs, you walk away with $152,000. Rent it out instead and the calculator makes renting the better move, by about $30,897 across five years.

Here is where that comes from. The place rents for $2,400 a month. Take out the $1,450 mortgage payment, $650 of tax, insurance and upkeep, and an 8% vacancy allowance for the months nobody is paying, and you clear $108 a month. Five years of that is only $6,480, which is not the interesting part. The interesting part is the $24,417 of principal your tenants retire for you in the same stretch. Stack both on the $152,000 you would have had anyway and renting, then selling, lands at $182,897.

Now change one number. If the honest market rent is $1,800, cash flow flips to $444 a month in the red, five years of that bleeds $26,640, and the paydown no longer covers it: selling now wins by $2,223. A $600 swing in rent reversed the whole answer. That is how close this call usually is, which is why the landlord hassle gets a vote. Put your own numbers in above.

What the margin leaves out

The winner and its margin are the least reliable numbers on this page, because three big forces sit outside the math entirely, and they do not all push the same way.

• Appreciation. The calculator holds the home’s value flat. If it rises, renting captures that gain and selling today does not, so leaving appreciation out tilts the result toward selling.
• What the sale proceeds could earn. Selling hands you a large sum that could sit in an index fund or a savings account rather than under a roof. The calculator assumes it earns nothing, which tilts the result toward renting, in the opposite direction. The two thumbs roughly cancel, which is why neither is on the scale.
• Tax on the rent. Rental income is taxable and the cash flow here is pre-tax. Deductions soften it, but the trickle you keep is thinner than the one you see.
• Your time. No line item covers the evening you spend chasing a plumber. It is not free, and on thin cash flow it can be most of what you are actually earning.

Treat the margin as a ceiling on renting’s advantage rather than a forecast. When renting wins by only a few thousand dollars across five years, the honest read is that the two options are a coin flip and the tiebreaker is not financial.

Renting it out is a job with a repair phone

The spreadsheet says landlord. Your life says second job. That gap is where most accidental landlords get hurt, because the work is invisible right up until it calls at eleven at night.

• Vacancy is not a pessimism setting. The 8% allowance is built in on purpose. Tenants leave, turnovers take weeks, and a month of paint and carpet between leases is ordinary rather than bad luck. A model with no vacancy in it is a fantasy.
• One roof erases years. At the default cash flow of $108 a month, the place throws off roughly $1,300 a year. A single roof, furnace, or sewer line costs several multiples of that. One bad year does not dent the return, it deletes the last four.
• One bad tenant costs more than one bad month. Nonpayment does not pause your mortgage, and removing someone who will not leave is slow and expensive wherever you live. Screening is the cheapest insurance you will ever buy.
• Distance multiplies everything. Landlording in your own town is a chore. Doing it four states away means paying a manager a slice of every month’s rent, or flying back to meet a contractor. Cut the rent by a management fee and run it again before you call yourself a long-distance landlord.

None of this makes renting wrong. It means the margin has to be big enough to pay you for the job, not merely to beat zero.

The accidental landlord trap

Here is the version of this decision that shows up most often, and it has nothing to do with cash flow. You bought near the top, or you poured money into a kitchen that never paid you back, and the offers coming in feel like an insult. So you rent it out instead, and tell yourself you will sell when the market comes back.

That is not an investment decision. It is a refusal to accept a price. The market does not know what you paid, and a house does not owe you your purchase price back. What you paid is gone under either option; the only live question is what the place is worth today and whether the rent justifies keeping it. Put it this way: if you would not buy this house at today’s value as a rental, with your own money, then holding on to it is that same bad bet made passively.

The tell is simple. Ask whether you would still rent it out if the calculator handed you a number you liked. If the answer is no, you are not choosing to be a landlord. You are avoiding a closing statement, and that usually costs more than the loss you are dodging.