Rent vs Sell Calculator
Wondering whether to sell your home or keep it as a rental? Bellhaven's Rent vs Sell Calculator runs both scenarios side-by-side — modeling cash flow, mortgage amortization, the §121 capital gains exclusion, depreciation recapture, and the opportunity cost of reinvesting sale proceeds — to project which path builds more wealth over your chosen holding period.
Enter your home value, mortgage balance, and a realistic monthly rent to see a clear verdict, a year-by-year wealth comparison chart, and a full waterfall breakdown of both paths. Open Advanced mode to dial in vacancy rate, property management fees, capital gains and income tax rates, and your reinvestment assumption, then save the analysis to a shareable link to send to your partner, agent, or CPA — no account required.
Year 1 Cash Flow
-$92/mo
Negative — feeds the property
Net If Sold Today
$248,500
After $31,500 costs & $0 tax
Equity at Y7
$474,643
Home value − loan balance
Tax Bill if You Rent
$69,653
§121 lost — full LTCG + recapture
📈 Wealth over time
Rent then sell
Sell now
Save or share your analysis
Recipients open the link and see every number you entered.
📋 Your numbers
Start with Simple. Open Advanced for tax, vacancy & growth dials.
Current home value
What it would sell for today
Mortgage balance
What you still owe on the loan
Monthly rent (Year 1)
What you'd realistically charge — check Zillow Rentals
Monthly taxes + insurance + HOA
The non-mortgage owner costs
How long would you hold it before selling?7 years
1 yr51015202530 yrs
Is this your primary residence?
§121 capital gains exclusion may apply
Filing status
Affects §121 exclusion amount
💰 Sell now — the breakdown
Sell today, invest the proceeds at 7% for 7 years.
Sale price
$525,000
− Selling costs
−$31,500
− Mortgage payoff
−$245,000
§121 exclusion applied
$153,500
− Capital gains tax
−$0
Net proceeds today
$248,500
Invested at 7% for 7y
$399,037
🏡 Rent then sell at Y7 — the breakdown
Rent it out, reinvest cash flow at 7%, then sell at year 7.
Year 7 home value
$667,947
− Loan balance at Y7
−$193,303
Equity
$474,643
− Selling costs
−$40,077
− Capital gains tax
−$53,108
− Depreciation recapture
−$16,545
Net sale proceeds
$364,913
+ Reinvested cash flow (7y)
$3,941
Total wealth at Y7
$368,854
💭 Beyond the math
Six considerations the spreadsheet can't price in. Read these before deciding.
You have a sub-market mortgage rate
Leans rentA locked-in 3% loan is hard to replace. Selling today means you can't redeploy that cheap leverage — buying a comparable rental again would cost you 6–7% money. The math model doesn't penalize selling for this; the real world does.
You might move back within 3 years
Leans rentRenting short-term keeps the §121 tax shield alive: as long as you've lived in the home 2 of the last 5 years before sale, the full $250k/$500k exclusion still applies. Renting beyond ~3 years forfeits it and the gain becomes fully taxable.
You believe your local market beats the national average
Leans rentThe model uses one appreciation rate for both scenarios. If you have a reason to think this neighborhood will outrun it — a major employer moving in, new transit, undersupply — holding captures upside that index funds can't.
You'd hate being a landlord
Leans sellLate-night plumbing calls, vacancies, evictions, paperwork. A property manager at 8–10% of rent dampens the headache but doesn't erase it. If the mental load isn't worth a few extra dollars per month, the math says "rent" but your sanity says "sell."
You need the cash for something specific
Leans sellAn illiquid asset growing at 4%/yr is the wrong place to be if a 7%+ obligation is bleeding you elsewhere — credit card debt, a down payment on a primary, business capital. Liquidity has a real, if unquantified, dollar value.
You're done with the uncertainty of homeownership
Leans sellBurst pipes happen in clumps. A single bad tenant or roof replacement can wipe out a year of returns. The model uses smooth averages; real life is lumpy. Selling converts a roller-coaster cash flow into a steady index-fund return.
📚 What the math is actually doing
🏛️§121 primary residence exclusion
If you lived in the home as your primary residence for 2 of the last 5 years before sale, you can exclude up to $250k of capital gain ($500k married). Convert to a rental and the 5-year clock starts running — sell within 3 years and you keep the full exclusion. Hold longer and you lose it.
📉Depreciation recapture
When you rent the property, the IRS lets you depreciate the building (not the land) over 27.5 years. That shields rental income from tax — but when you sell, the IRS takes 25% of every dollar you depreciated. There's no way around it, even with §121.
🔄Why reinvestment rate matters
Selling isn't free — you have to do something with the cash. We model it earning the reinvestment rate (default 7%, roughly long-run S&P 500). Lower this if you'd just park it in a savings account. Higher if you're an active investor.
📊The two scenarios
Sell now: home value − selling costs − loan payoff − tax = cash. Invest that lump sum at the reinvestment rate. Rent then sell: collect annual cash flow (rent minus all expenses) reinvested at same rate, plus the after-tax sale proceeds at year N.
⚠️What this calculator can't predict
Property appreciation, rent growth, and investment returns are estimates — actual outcomes will diverge. Vacancies happen in clumps, not as a smooth %. A bad tenant or burst pipe can wipe out a year of returns. Use a 5-year horizon at the shortest for any real decision.
🧮Disclaimer
This is a planning tool, not tax advice. Real-world tax treatment depends on your specific facts, state taxes (not modeled here), NIIT, AMT, prior depreciation, and other variables. Run the numbers with a CPA before pulling the trigger either way.
