Rent vs. Sell Calculator

The rental side starts with the rent you enter, removes the vacancy allowance, then subtracts the management fee, a monthly maintenance set-aside based on the percentage you choose, and the full mortgage payment including taxes and insurance. The result is estimated monthly cash flow, which is different from rent minus mortgage.

The sale side takes today's value, less selling costs and the mortgage balance. Selling costs vary, so enter an estimate that reflects commission, documentary stamp taxes, title costs, and any concessions you expect.

The hold side grows the value at the appreciation rate you enter, applies selling costs at the end, and adds the cash flow collected along the way. The break-even year is the first year the hold total passes the sale proceeds available today. These are different timing scenarios: future dollars are not discounted or compared with returns you might earn elsewhere.

Mortgage principal paydown is not included, because modeling it requires your rate, term, and position in the loan schedule. Other omissions can push the result in either direction, so treat the comparison as a rough scenario, not a conservative one.

Also left out: income tax on rental income, depreciation and its recapture on sale, capital gains treatment, the primary residence exclusion, HOA dues unless included in the payment, leasing fees, and major capital work. Talk with your accountant before you decide.

Understanding the Estimate

What vacancy allowance should I use?

Use your own rental history if you have it. A higher allowance may make sense for a property that takes longer to lease, sits at the top of the local rent range, or will be rented seasonally rather than on annual leases.

What maintenance percentage should I use?

One percent of value per year is a common rough starting point. Older homes, pools, and aging roofs or air handlers may call for more. The maintenance reserve calculator offers another estimate based on age and systems.

How should I choose an appreciation rate?

Appreciation is an assumption you enter, not a forecast. Values can rise slowly, stay flat, or fall. Try several rates, including low or zero, to see how much the result depends on growth.

What about the primary residence capital gains exclusion?

If the property has been your primary residence for two of the last five years, part of the gain may be excludable when you sell. Converting it to a rental can affect that. This calculator does not model it, and it can significantly change the result. Ask your accountant about it before you convert.