Rent vs Sell Calculator

When you own a property, one of the most common financial dilemmas is whether to rent it out or sell it. Each option has its pros and cons, and the decision depends on income potential, appreciation, costs, and investment returns.

A Rent vs Sell Calculator helps you compare both scenarios over a chosen time horizon, giving you a clearer picture of which option may be financially better.

Formula for Renting Scenario

The total value if you rent the property is based on rental income and appreciation:

$\text{Total Rent Value}=\left(\text{Monthly Rent}\times 12\times \text{Time Horizon}\right)+\left(\text{Property Value}\times (1+\text{Appreciation Rate}{)}^{\text{Time Horizon}}\right)$

Formula for Selling Scenario

If you sell the property, account for selling costs and potential investment growth:

$\text{Net Sale Proceeds}=\text{Property Value}-\left(\text{Property Value}\times \text{Selling Cost \%}\right)$

Then invest the proceeds:

$\text{Total Sell Value}=\text{Net Sale Proceeds}\times (1+\text{Investment Return Rate}{)}^{\text{Time Horizon}}$

Step-by-Step Process

1. Enter Property Value, Monthly Rent, Appreciation Rate, Rent Growth (if any), Selling Costs, Investment Return Rate, and Time Horizon.
2. Calculate the Total Rent Value.
3. Calculate the Total Sell Value.
4. Compare results to decide whether renting or selling is better.

Example of Rent vs Sell

Suppose:

• Property Value = $300,000
• Monthly Rent = $1,500
• Appreciation Rate = 3% per year
• Selling Costs = 5%
• Investment Return Rate = 6%
• Time Horizon = 5 years

Step 1: Renting Scenario

$\text{Total Rent Value}=(1,500\times 12\times 5)+(300,000\times (1+0.03{)}^5)$

$\text{Total Rent Value}=90,000+347,782.11=437,782.11$

Step 2: Selling Scenario

$\text{Net Sale Proceeds}=300,000-(300,000\times 0.05)=285,000$

$\text{Total Sell Value}=285,000\times (1+0.06{)}^5=381,616.88$​​​​​​​

👉 Result: Renting yields $437,782.11, while selling and investing yields $381,616.88.
So, Renting is the better option in this case.

Why Use a Rent vs Sell Calculator?

• Clarity – Removes guesswork by showing numbers clearly.
• Better Decisions – Helps property owners choose between renting and selling.
• Financial Planning – Estimates long-term wealth from both options.