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Rent vs sell calculator
Two futures for the same property on the same day. What you would actually hold after selling costs, the loan and the tax, against what the equity earns if it stays where it is.
Short answer
To decide whether to rent or sell, compare the cash you would keep after a sale against the return your equity earns by staying invested. The sale side is net proceeds minus loan payoff minus tax, where depreciation you took is recaptured at up to 25% before the rest gets long-term capital gains treatment. The keep side is cash flow plus principal paydown plus appreciation, divided by the equity currently locked in the property.
Commission plus closing costs. 6 to 9% is typical.
What you paid, plus capitalized improvements since.
Recaptured at up to 25% whether or not you claimed it.
0, 15 or 20% federal for most filers, before state tax.
NOI minus debt service, for the next 12 months.
Principal your tenant retires over the next 12 months.
The most uncertain input here. Try it at 0% too.
Return on equity if you keep it
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Cash flow, principal paydown and appreciation, over the equity currently locked in the property. Compare it against what that same equity would earn somewhere else.
If you sell
If you keep
A one-page list of what to gather before you fill in Schedule E. Occasional landlord tax and product notes, unsubscribe anytime.
Why the tax line decides this more often than the price
Most rent-versus-sell arithmetic goes wrong in the same place. The sale price is easy, the commission is easy, the loan payoff is on a statement. Then the gain gets multiplied by a capital gains rate and the answer comes out several thousand dollars too optimistic, because the gain is not all one thing.
Every dollar of depreciation you took reduced your basis, and on sale that portion comes back first as unrecaptured section 1250 gain, taxed at a federal rate of up to 25% regardless of your bracket. Only what is left over gets long-term capital gains treatment at 0, 15 or 20%. On a property you have held for a decade, recapture is routinely the biggest number in the column.
Worked example
Sale price: $450,000
Selling costs at 8%: $36,000
Net proceeds: $414,000
Cost basis $300,000 less $60,000 depreciation = $240,000
Total gain: $174,000
Recapture on $60,000 at 25%: $15,000
Capital gain $114,000 at 15%: $17,100
Total tax: $32,100
Run that same gain at a flat 15% and you get $26,100, which is $6,000 of tax that does not exist in the spreadsheet and does exist in April. Note also that recapture applies to depreciation allowed or allowable: if you never claimed it, you are still taxed on it.
Return on equity is the question, not cash flow
A property that cash-flows $400 a month feels like it is working. The better question is what that performance looks like against the equity it is standing on. Two hundred thousand dollars of trapped equity earning $9,000 a year is a 4.5% return. That may be fine, or it may be well under what the same money would do somewhere else at similar risk, and you cannot tell without dividing.
Count all three components on the keep side, not just the cash: rent that clears the mortgage, principal your tenant retires each month, and appreciation. Appreciation is the one to be careful with, because it is a forecast wearing the clothes of a calculation. Run the whole thing at 0% appreciation once and see whether the answer holds.
What is deliberately not modelled
This assumes an outright taxable sale. A 1031 exchange defers both taxes if you reinvest within the deadlines and would change the sell column materially. The section 121 primary-residence exclusion is not modelled either, and it can apply if you lived in the property for two of the last five years. State income tax and the 3.8% net investment income tax are not included. Estimates for planning, not tax advice.
Where this number leads next
When to sell a rental property: a return-on-equity framework
The one metric that settles sell-or-keep, plus the after-tax net you would actually walk away with, recapture and all.
Selling a rental property: the taxes, with worked numbers
Adjusted basis, accumulated depreciation, unrecaptured 1250 gain, long-term gain, and NIIT, walked end to end on one sale.
Depreciation recapture when you sell a rental property
The deduction you took every year comes due at the sale. How recapture works, the 25% cap, and the trap that bites if you never claimed it.
1031 exchanges for small landlords: rules, timelines, and when to skip it
The 45 and 180-day clocks, the qualified-intermediary rule, and the honest math on when a one-property exchange is not worth it.
You don't have to run this by hand.
rents.ai already holds the inputs this needs: cost basis, accumulated depreciation, loan balance and real cash flow per property, kept current instead of reconstructed the week you start thinking about selling.