Sell vs Rent-Out Calculator
Should you sell, or keep it as a rental?
Property & taxes
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If rented
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Comparison horizon
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At year 10
Sell it
Selling now and investing the proceeds leaves you $248 wealthier.
Sell now: net proceeds$238,000
Sell + invest @7% (yr 10, after tax)$433,655
Rent + sell at yr 10 (after tax)$433,407
Difference-$248
Selling ahead by
$248
at year 10
Net if sold today
$238,000
$600,000 − costs − tax
Year-1 rental cash flow
-$3,630
negative
Capital gains exemption
$500,000
MFJ Section 121
Break-even year
Year 1
when rent overtakes sell
Wealth over time
Sell now + invest at discount rate Hold + rent (sell at year)
| Yr | Home value | Cash flow | Sale net (rent path) | Sell+invest | Rent + sell later | Diff |
|---|---|---|---|---|---|---|
| 1 | $618,000 | -$3,630 | $259,511 | $252,161 | $255,881 | $3,720 |
| 2 | $636,540 | -$3,050 | $281,864 | $267,313 | $274,968 | $7,655 |
| 3 | $655,636 | -$2,453 | $305,089 | $283,526 | $295,328 | $11,802 |
| 4 | $675,305 | -$1,835 | $301,012 | $300,874 | $288,828 | -$12,046 |
| 5 | $695,564 | -$1,198 | $323,248 | $319,436 | $309,128 | -$10,308 |
| 6 | $716,431 | -$541 | $346,368 | $339,298 | $330,846 | -$8,452 |
| 7 | $737,924 | $138 | $370,403 | $360,550 | $354,065 | -$6,484 |
| 8 | $760,062 | $838 | $395,386 | $383,289 | $378,875 | -$4,414 |
| 9 | $782,864 | $1,561 | $421,351 | $407,620 | $405,368 | -$2,252 |
| 10 | $806,350 | $2,067 | $448,334 | $433,655 | $433,407 | -$248 |
Tax model details: The rental side credits depreciation as an annual tax shield against positive rental income (lesser of basis or current value × 80% / 27.5 yrs at your marginal rate) and debits the recapture at sale (§1250, lesser of 25% or marginal). Net rental losses get no current benefit (treated as suspended). Long-term capital gains are bracketed off your marginal income tax (0% / 15% / 20%) with the 3.8% NIIT layered in for higher brackets. Cumulative rental cash flow is reinvested at the discount rate, the same return the “sell + invest” portfolio earns. Both paths are shown as after-tax wealth if liquidated in that year: investment growth on each side (sale proceeds invested today, and reinvested rental cash flow) is taxed at the same long-term capital-gains rate, just as the rental’s own sale gain is. This assumes a buy-and-hold portfolio with no yearly tax drag from dividends or turnover. Caveats not modeled: using rental losses under the §469 $25k allowance (MAGI under $150k) or releasing suspended losses at sale, 1031 exchange option, QBI/§199A deduction for rentals that qualify, state taxes on capital gains and rental income. Section 121: 2-of-5 lookback approximated as a 3-year cliff after conversion. Always confirm with a CPA.