How This Calculator Works
This calculator helps you compare the financial outcome of selling your home now versus renting it out for a period and then selling (or keeping as a rental). It models all major costs, taxes, appreciation, rental income, and investment returns, so you can make a data-driven decision.
- Selling Now: Calculates your net proceeds after subtracting:
- Selling Costs: Agent commissions, closing costs, etc. (choose % or $)
- Mortgage Payoff: The remaining balance on your mortgage
- Refurbishing Costs: Any costs to prepare the home for sale
- Capital Gains Tax: Tax on profit above your purchase price (with $250,000 exclusion if primary residence toggle is on)
- Renting Out: Simulates each year of rental, accounting for:
- Rental Income: Monthly rent, adjusted for occupancy and annual increases
- Vacancy: Based on occupancy rate
- Management Fees: % of rent paid to property manager
- Maintenance, HOA, Insurance, Taxes: Annual and monthly costs
- Capital Improvements & Make-Ready Costs: Upfront and ongoing costs for renting
- Rental Profit Tax: Tax on net rental profit (your marginal rate)
- Depreciation & Recapture: If enabled, models tax savings and recapture at sale
- Appreciation: Home value increases each year by your chosen rate
- Final Sale: After X years, calculates proceeds from selling (or disables if "Do not sell after renting" is toggled)
- Investment Return: If you sell, you can specify an after-tax annual return for investing the proceeds. The calculator compounds your net proceeds at this rate for the holding period, showing the future value of selling and investing.
Key Features & Toggles
- Selling Costs Toggle: Switch between % of home value or flat $ amount for selling costs.
- Primary Residence Toggle: Applies a $250,000 capital gains exclusion if you lived in the home 2 of the last 5 years.
- Do Not Sell After Renting: If enabled, the calculator only sums rental cash flows and does not include a final sale.
- Depreciation: If enabled, models annual depreciation and recapture tax at sale.
Assumptions & Tips
- Mortgage payments during rental are not modeled (assumes interest-only or paid off; adjust as needed).
- All costs and returns are in today's dollars (no inflation adjustment).
- Capital improvements and make-ready costs are subtracted from rental proceeds.
- For most accurate results, use realistic values for vacancy, appreciation, and expenses.
- Consult a tax advisor for your specific situation, especially regarding capital gains and depreciation recapture.
Summary: This tool gives you a comprehensive, side-by-side comparison of selling now versus renting out your property, factoring in all major financial variables. Use it to make a confident, informed decision!
