Rent vs Sell — Keep Current Home 2027 NPV Calculator
Moving but not sure whether to rent or sell your current home? Compare 10-year NPV of renting it out (cash flow + appreciation + tax shield) vs selling now and investing proceeds in stocks/bonds. Free, private, no signup.
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Should you rent or sell your current home when moving?
When you're moving for a new job or upsizing, you face a fundamental choice: rent out your current home and become a landlord, or sell it and invest the proceeds. The right answer depends on six variables: (1) cash flow if rented vs PITI cost, (2) expected home appreciation, (3) alternative investment return, (4) tax shield from depreciation, (5) the §121 home-sale capital gains exclusion clock, and (6) your appetite for being a landlord.
Many homeowners default to selling because it's simpler — no tenants, no maintenance, clean break. But selling forfeits the substantial tax benefits of holding rental real estate (depreciation, write-offs, 1031 exchanges) and locks you out of future appreciation. Renting creates long-term wealth but adds complexity. This calculator quantifies both paths over a 10-year horizon to help you decide.
The Section 121 capital gains exclusion clock
One overlooked factor: the Section 121 home sale exclusion. If you lived in your home as your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 of capital gain from your sale ($500,000 if married filing jointly). This is one of the largest tax breaks in the IRS code.
If you move out and rent the home, the 5-year lookback clock starts ticking. You have 3 years from moving out to sell and still qualify for the exclusion. After year 3, you lose §121 entirely — and now must pay capital gains tax on the full gain plus depreciation recapture at 25%. So renting for 1–3 years can be "free" tax-wise; renting beyond year 3 has real tax cost. Many homeowners use this window to capture rental cash flow then sell tax-free.
Cash flow vs net worth — what really matters
Many landlords focus on monthly cash flow when deciding whether to rent. But total net worth at exit is what matters most for long-term wealth. A rental that breaks even on cash flow can still build $200K+ in equity over 10 years through principal paydown + appreciation. Conversely, selling and investing $200K at 7% for 10 years grows to roughly $393K — solid but limited.
For a $500K home with $250K mortgage at 3.5% locked in, the rental scenario often wins by $50K–$150K over 10 years due to the leverage (3.5% borrowing rate vs 7% asset appreciation). For a home you'd refinance into a 7% rate, the math gets much closer to selling. Always run actual numbers — this calculator does both scenarios with your specifics.
Sources: IRS Publication 523 (§121 home sale exclusion), IRS Publication 527 (Residential Rental Property), NAR.realtor rent vs sell guides, BiggerPockets rental conversion library, HUD multifamily market data. Last updated: May 2026.