FREE CALCULATOR
Should you rent your house or sell it?
Two honest numbers — what renting puts in your pocket each month, and what selling puts in your hand today — plus the deadline most accidental landlords never hear about.
Should you rent your house or sell it?
Most people who end up renting out their home didn't plan to. A job moved, a sale fell through, the market was soft, a parent passed. The question arrives fast, and it usually gets answered with one comparison: will the rent cover the mortgage? That's the wrong comparison, for two reasons.
1. The mortgage isn't the cost — it's part of the cost
A rental also carries property tax, a landlord insurance policy (usually pricier than homeowner's), repairs you can no longer put off, and the weeks it sits empty between tenants. A house that rents for $2,400 against a $1,450 mortgage looks like $950 a month of profit. Add tax, insurance, an 8% repair reserve, and 5% vacancy, and it can be roughly break-even.
2. Waiting has a tax deadline
If you lived in the home for at least 2 of the last 5 years, you can usually sell it and keep up to $250,000 of gain tax-free ($500,000 for most married couples filing jointly). Move out and rent it, and that window starts closing: you generally need to sell within about three years of moving out to still pass the test. Miss it, and gain you could have kept becomes taxable.
That's why this calculator shows the date, not just the cash flow. Renting for two years and then selling can be a great plan. Renting for four years and then selling can cost you a five- or six-figure tax bill you didn't need to pay.
When renting tends to win
- The rent comfortably covers all costs, not just the mortgage.
- You have a low fixed mortgage rate you'd never get again.
- You might move back, or you want to hold the home long-term and accept the tax trade-off.
- You have cash for a surprise repair without it becoming a crisis.
When selling tends to win
- Renting barely breaks even, or loses money each month.
- Your gain is large and fully tax-free today.
- You'd be managing from far away with no one local to call.
- You need the equity for your next home.
If you do decide to rent it, the first year is where most accidental landlords stumble — the lease, the deposit, collecting rent without awkward texts. That part we can help with.
Want a starting point from your area? See median home values, rents and property tax for Texas, Florida and Washington cities in rent or sell by city.
QUESTIONS
Common questions
Is it better to rent out my house or sell it?
It depends on two numbers: the monthly cash flow after every cost (not just the mortgage), and how much tax-free gain you would give up by waiting. If renting barely breaks even and your sale would be tax-free today, selling often wins. If rent comfortably covers costs and you sell before the 2-of-5-year window closes, renting can win on both.
Do I lose the home-sale tax exclusion if I rent out my house?
Not immediately. You can still exclude up to $250,000 of gain ($500,000 for most married couples filing jointly) as long as you lived in the home for at least 2 of the 5 years before the sale. That means you typically have up to 3 years after moving out to sell. Depreciation taken while it was a rental is taxed either way.
What costs should I include when renting out my house?
Mortgage, property tax, a landlord insurance policy (usually more than homeowner's insurance), HOA dues, a maintenance reserve of around 5–10% of rent, and vacancy. Leaving out maintenance and vacancy is the most common reason a rental that looked profitable on paper loses money.