ð Should I sell or rent out my property?
Determine the benefits of renting versus selling your property, accounting for expenses, taxes, and investment opportunities.
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Deciding whether to sell your property or become a landlord is more than finances, it's a life choice. Selling can provide immediate cash for other investments, while renting can generate long term income and build equity.
In this view, we explore outcomes of both paths over a specific timeframe to see which better aligns with your goals.
Start with the basics of your property and current mortgage. The current market value is crucial for both selling now and calculating future appreciation if you rent. Your mortgage details are used to determine how much equity you build each month versus how much you pay in interest.
Monthly PMI
Monthly Mortgage Total
If you rent out the property, you will have income and expenses. Factor in expected rent, costs like property management and maintenance, and how long you plan to rent it out. Do not forget to estimate the property's appreciation rate, as this is a key component of your total return.
Selling involves one time costs but frees up capital. Estimate your closing costs, which primarily consist of agent commissions. Your tax situation is also important. If you have lived in the home for two of the last five years, you may qualify for a significant capital gains tax exclusion.
There's a lot more that goes into this kind of decision than can be captured in the simple mortgage and future value estimates above.
Here are a few thoughts that might prove clarifying.
First off, landlording is a job unto itself. Maintenance, HOA meetings, taxes. You need to budget time and maybe you should think about how that time is rewarded. Here's an hourly pay calculator for you Mr. Landlord / Ms. Landlady.
Landlording Hourly Pay
Right now you own a certain percentage of the property, by the end you might own a lot more. Here's how your equity is projected to change.
Current Ownership %
Current Ownership Value
Future Ownership %
Future Ownership Value
Change in Ownership %
Change in Ownership Value
ð Results
Rent: Monthly Cashflow
Rent: Monthly Net Cashflow
Rent: Total Gain
Sell: Total Gain
Net Advantage of Renting
Last updated by mahmoud (v25.12.0)
Privacy: None of your data is transmitted to the author of this view or any other third parties. Financial inputs are not used to for identification purposes, and are only used to calculate the result.
Disclaimer: This content and any calculations provided are for informational purposes only. The views, calculations, and methodologies expressed are those of the author and do not necessarily reflect those of this platform. Not financial advice. Users are solely responsible for any decisions made based on this information.
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