Rent vs Sell Calculator: Should You Keep Your Rental or Sell It?
Should you keep renting your property or sell it now? This free rent vs sell calculator compares both choices over the same number of years: the cash you would have from selling today (after selling costs, the loan payoff, depreciation recapture and capital gains tax) and invested, against the rent cash flow, rising value and loan paydown if you keep it. Built for small landlords with one rental or a few.
How the rent vs sell calculator works
The calculator puts both choices on the same clock. Pick a number of years, and it shows how much money you would have at the end of that time either way.
- Sell now: sale price, minus selling costs, minus the loan payoff, minus the tax on your gain. The cash left is invested at the return you choose until the end of the period.
- Keep renting: every year's rent minus costs and loan payments, plus what the property would sell for at the end (after selling costs, the loan left and the tax on the later sale).
Rent and costs grow at the same yearly rate you enter. Cash flow and investment returns are shown before income tax, so the result is a fair comparison, not your exact tax bill.
Example: a single family rental worth $300,000
A landlord paid $200,000 for a house and put $10,000 into improvements, so the starting basis is $210,000. Over the years they claimed $55,000 of depreciation. The house would sell for $300,000 today, the loan balance is $120,000 at 4% with 20 years left, rent is $2,000 a month and costs (taxes, insurance, repairs, vacancy) are $700 a month.
| Sell now | |
| $300,000 minus 7% selling costs | $279,000 |
| Gain: $279,000 minus adjusted basis of $155,000 ($210,000 minus $55,000) | $124,000 |
| Tax: $55,000 recapture at 25% plus $69,000 at 15% | $24,100 |
| Cash in hand after paying off the $120,000 loan | $134,900 |
| Invested at 6% for 10 years | $241,585 |
| Keep 10 more years | |
| Rent cash flow after costs and loan payments ($727 a month) | $91,575 |
| Sale in 10 years at 3% growth ($403,175) minus costs, loan left ($71,823) and tax ($53,948) | $249,182 |
| Total | $340,757 |
In this example, keeping the house comes out about $99,000 ahead, because the rent covers the loan and the tenant pays the loan down while the value grows. The result flips if the rent barely covers the costs, if values stop rising, or if you can earn much more on the sale money elsewhere. Change the numbers above to see where the line is for your property.
Taxes when you sell a rental property
- Depreciation recapture. The part of your gain that comes from depreciation you claimed (or could have claimed) is taxed at your ordinary rate, up to a maximum of 25% (IRS Topic 409). Try our depreciation recapture calculator.
- Long-term capital gains. The rest of the gain on property held more than a year is taxed at 0%, 15% or 20% depending on your taxable income. For 2025 the 0% rate applies up to $48,350 of taxable income for single filers and $96,700 for married couples filing jointly, and 20% starts above $533,400 and $600,050 (IRS Topic 409). See capital gains tax on a rental property.
- Net investment income tax. An extra 3.8% can apply to rental income and gains when your modified adjusted gross income is over $200,000 (single), $250,000 (married filing jointly) or $125,000 (married filing separately) (IRS Topic 559).
Two ways to lower the tax
- 1031 exchange. If you sell and buy another investment property under the like-kind exchange rules, you can put off the tax on the gain (IRS: like-kind exchanges). Strict deadlines apply, and you usually need a qualified intermediary.
- Home sale exclusion. If the rental used to be your home, you may exclude up to $250,000 of gain ($500,000 married filing jointly) when you owned and lived in it for at least 2 of the 5 years before the sale (IRS Topic 701). Depreciation claimed after May 6, 1997 still can't be excluded (IRS Publication 523).
Questions to ask before you decide
- Does the rent cover the loan and all costs, with money left for repairs? Check with our cap rate calculator.
- Is a big repair coming soon, like a roof or HVAC system?
- Do you still want to be a landlord, or would you rather have the cash and the free time?
- Is your tenant on a lease? A sale usually doesn't end a lease, so check your state rules and see our notice to vacate guide.
Frequently asked questions
Is it better to rent or sell my house?
It depends on your cash flow, how fast values rise where you are, your loan rate and what you could earn on the sale money. Keeping usually wins when the rent clearly covers the loan and costs. Selling often wins when cash flow is thin, a big repair is due or you can invest the money at a higher return.
What is depreciation recapture?
When you sell a rental, the depreciation you deducted lowers your basis, which makes your gain bigger. That part of the gain is taxed at your ordinary rate, up to 25%, instead of the lower capital gains rates.
How much does it cost to sell a rental property?
Selling costs include agent commission, closing costs, transfer taxes and any repairs before the sale. They vary a lot by state and by deal, so enter your own estimate. The 7% in the calculator is only a starting point.
