Allen Markel, REALTOR® · Texas Premier Realty

Selling

Sell or rent

List it now or lease it for a few years and sell later? The walk-away each way, with the rental's cash flow counted.

5% is about 2½ weeks empty a year.

As a rental — the homestead exemption ends when you move out.

0 if you manage it.

An assumption.

Rent it for how long, then sell?

3 years

Starts at the local figure below. Edit it — negative means falling.

We couldn’t load local home-sales data just now, so this starts at 0% (no change assumed). Enter your own assumption.

If you sell now and save or invest it. Your assumption; 0 = not counted.

After 3 years

$1,737 ahead by selling now

Sell now: walk-away today
$153,738
Selling now, total
$153,738
Rent collected, after vacancy
$2,280/mo
Expenses (tax, insurance, HOA, upkeep, management)
−$1,532/mo
Mortgage payment (P&I)
−$1,251/mo
Monthly cash flow
−$503/mo
Cash flow over 3 years
−$18,106
Walk-away when you sell in 3 years (at $400,000)
$170,107
Renting, then selling, total
$152,001

Rent and expenses are held flat. Walk-away = price − mortgage payoff − commission − the state-regulated title policy, the same math as the seller net sheet.

Full seller net sheet →What’s my home worth? →

Before you decide

  • Sell a home you lived in for 2 of the last 5 years and up to $250,000 of the gain ($500,000 married filing jointly) can be tax-free (IRS Section 121). Rent it out for more than 3 years and that window closes.
  • Rental income is taxable, and depreciation you take is taxed again when you sell.
  • A landlord handles repairs, turnover and tenant screening under Texas law and fair housing law — or pays a manager to.

Run the tax side past a CPA before choosing.

Budgetary comparison, not tax, legal or investment advice. It leaves out rent increases, repairs between tenants, income taxes, and any gain on the cash beyond the return you enter. Home values can fall as well as rise.

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Allen Markel is a licensed Texas REALTOR®, not a mortgage lender or loan originator. He does not quote rates or terms and does not decide whether you qualify — only a lender can do that. Introductions are a courtesy; you choose who to work with.

Numbers raising questions? Walk through them with a person.

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Questions about Sell Or Rent

What it does

  • What does the sell or rent calculator compare?

    It compares selling your home now with renting it out for a number of years and selling later. For each path it shows the walk-away, and for the rental it counts the monthly cash flow. The result tells you how far ahead one path is under your assumptions.

  • Is renting out my home a fit for me, or should I sell?

    It fits an owner who is moving or has a second place and is deciding between listing now or leasing it for a few years. It is a budgetary comparison, not tax, legal or investment advice. Talk to us if you want help weighing your options.

The inputs

  • What do I enter for the rent I could get?

    Enter the monthly rent you think the home would lease for. Be honest and a bit careful, since an optimistic number makes renting look better than it is. If you are unsure, try a lower amount to see how sensitive the result is.

  • What is the vacancy setting?

    It is the share of the year the home sits empty between tenants. The page notes that 5 percent is about 2 and a half weeks a year. A higher setting lowers the rent you collect, so try a more cautious number if turnover is likely.

  • What are management and upkeep in the inputs?

    Management is the percentage of rent you would pay a property manager, and it should be zero if you manage the home yourself. Upkeep is a percentage of the home's value per year, and the page calls it an assumption. Both lower your cash flow.

  • What does sale cash earns mean?

    It is the yearly return you assume on the money from selling now, if you save or invest it. It is your own assumption, and zero means it is not counted. Setting it gives the sell-now path credit for what the cash could do.

Reading the result

  • How do I read the ahead by renting number?

    It is the difference between the total from renting and then selling and the total from selling now, under your assumptions. If it says ahead by selling, listing now comes out better. It changes with the inputs, so try several settings.

  • What is the monthly cash flow figure?

    It is the rent you collect after vacancy, less expenses such as tax, insurance, HOA, upkeep and management, and less the mortgage payment. If it is negative, you are paying out of pocket each month to hold the home as a rental. The page then totals it over the years.

  • How is the walk-away when I sell later calculated?

    It takes the projected value after the years you choose, using the home value change you enter, and subtracts the mortgage payoff, commission and the state-regulated title policy. It is the same math as the seller net sheet. The projection is your assumption, not a forecast.

Limits

  • What does the sell or rent calculator leave out?

    It leaves out rent increases, repairs between tenants, taxes on the rent and any gain on the cash beyond the return you enter. Rent and expenses are held flat. Home values can also fall as well as rise, so treat the result as a rough comparison.

Next steps

  • What should I try after running the calculator?

    Change the rent, vacancy and the number of years to see how the answer moves. Open the full seller net sheet and the home value tool for a closer look at the sale side. Then talk to us and a CPA so the numbers fit your situation.

Before you decide

  • Why do property taxes change when I rent the home?

    Tax treatment can differ once a home stops being your residence, so the calculator asks you to enter taxes as a rental. Your appraisal district or tax office can tell you what applies to your property, and a CPA or tax advisor can explain how renting affects your overall tax picture. Run those numbers with them before you rely on the result.

  • What should I know about taxes before deciding?

    Selling and renting are taxed differently, and the details depend on how long you lived there, how long you rent, what you earn from the rental and what you depreciate. That is CPA territory, not ours. Ask a CPA or tax advisor what happens to a sale now versus a sale after renting, and bring them the calculator results. Talk to us about the sale and timing side.

  • What does being a landlord involve?

    Repairs, turnover, finding and screening tenants, rent collection and a written lease. You can do that work yourself or pay a property manager, and either choice changes the cash flow the calculator shows. An attorney can advise on the lease and your obligations as a landlord. Decide how much of that role you want before you choose to rent instead of sell.

Using the tool

  • Is renting my home better than selling it?

    Neither is better for everyone. The calculator compares the walk-away from selling now with renting for a few years and selling later, counting the rental's cash flow. Taxes, risk, how much work you want and what you will do with the money matter too. Ask a CPA about the tax side, then talk to us about the sale options and timing.

  • Can I really guess the home value in a few years?

    No one can, and the calculator treats it as your assumption, starting from a local trend and labeled as context rather than a forecast. Values can fall as well as rise. Try a higher and lower number to see how much the answer depends on it before you decide.

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