Sell or rent it out calculator

Two paths built from visible assumptions

Selling a property and turning it into a rental are both ways of converting one asset into something else — cash now, or cash flow plus equity later. This calculator lines up both paths so the choice is about your assumptions, not a guess.

Who should use this calculator

Use it when you already own a property — often one you are moving out of — and are deciding whether to sell it or become a landlord. Build the rental assumptions on the Rental Cash Flow Calculator first, then bring the resulting numbers here.

What each input means

• Current property value, loan payoff, selling costs, and other sale/move costs — build the sell-now net proceeds.
• Monthly rent, vacancy/collection loss, annual operating costs, and monthly debt service — build the annual rental cash flow, the same categories as the Rental Cash Flow Calculator.
• Years held as rental and annual value-change scenario — the holding period and an appreciation assumption used only to project future value.
• Loan balance after holding period — your estimate of what would still be owed at the end of that period, used to compute future equity.

How the calculation works

The sell-now path starts with current property value, subtracts selling costs, loan payoff, and other entered sale or moving costs, and shows estimated net proceeds. The rent-out path adds cumulative pre-tax rental cash flow over the selected holding period to estimated future equity. Future equity uses the annual value-change scenario and the future loan balance entered by the user.

A worked example, using the figures already loaded above

On the default $500,000 property with a $250,000 loan payoff, selling now nets about $205,000 after 7% selling costs and $10,000 in other costs. Renting it out at $3,200 a month, after 5% vacancy, $14,000 in annual operating costs, and $1,800 monthly debt service, produces roughly $880 a year in pre-tax cash flow. Over a 5-year holding period at 3% assumed annual appreciation, with a future loan balance of $220,000, projected future equity is about $359,600. Cumulative cash flow plus future equity comes to about $364,000 — roughly $159,000 more than selling now, under these specific assumptions.

How to interpret the result

Most of the rent-out path's advantage in this example comes from projected appreciation on the property's full value, not from the modest annual cash flow — so the result is highly sensitive to the appreciation and future-loan-balance assumptions. Re-run the comparison with flat or declining values and a more conservative future loan balance before treating either path as the clear winner.

What this calculator does not include

• Income tax, depreciation, recapture, or capital-gains treatment on either path.
• Any investment return on the sale proceeds if you sold and invested the cash instead.
• The value of your own time, effort, and risk as a landlord.
• Mortgage amortization detail — the future loan balance is a single number you estimate, not a computed schedule.

Why the result is an estimate

Every figure is arithmetic on assumptions you supplied, most importantly the appreciation rate and future loan balance, which are scenario inputs, not predictions. The displayed difference is not a verdict.

Common mistakes to avoid

• Treating the appreciation percentage as a forecast rather than one scenario worth testing against flatter and negative cases.
• Guessing at the future loan balance instead of pulling it from an amortization schedule or loan statement.
• Skipping tax advice before acting — converting a primary residence to a rental has tax consequences this tool does not calculate.

Use scenario ranges

• Test lower rent, higher vacancy, and higher operating costs.
• Test flat or declining property value as well as appreciation.
• Use a loan statement or amortization schedule for future balance.
• Obtain tax advice before acting on a real sale or conversion to rental.

Related guides and calculators

• Rental Cash Flow Calculator — build the rental assumptions before comparing the two paths.
• Stay or Sell calculator — the equivalent comparison for an owner-occupied home.
• Cap Rate calculator — screen the rental option independently of financing.
• How to evaluate a rental property before buying — the full verification workflow behind these numbers.