Sell vs Rent Calculator – Loan calculator

Sell vs. Rent Calculator

Deciding whether to sell your property or rent it out can be a complex financial choice. This calculator helps you compare the potential financial outcomes of both scenarios over a specified time horizon, considering various costs, incomes, and growth rates.

Property Details (Current)

Current Property Value ($): Outstanding Mortgage Balance ($): Original Purchase Price ($): Years Property Owned:

Selling Scenario Inputs

Selling Costs (% of Value): Capital Gains Tax Rate (%):

Renting Scenario Inputs (Monthly)

Expected Monthly Rent Income ($): Monthly Mortgage P&I Payment ($): Monthly Property Taxes ($): Monthly Home Insurance ($): Monthly HOA Fees ($):

Renting Scenario Inputs (Annual)

Annual Maintenance (% of Value): Annual Vacancy Rate (%): Property Management Fees (% of Rent):

Growth & Comparison

Annual Property Appreciation Rate (%): Investment Return Rate (for Sale Proceeds) (%): Comparison Time Horizon (Years):

function calculateSellVsRent() { // Get input values var currentPropertyValue = parseFloat(document.getElementById('currentPropertyValue').value); var outstandingMortgage = parseFloat(document.getElementById('outstandingMortgage').value); var originalPurchasePrice = parseFloat(document.getElementById('originalPurchasePrice').value); var yearsOwned = parseFloat(document.getElementById('yearsOwned').value); var sellingCostsPercent = parseFloat(document.getElementById('sellingCostsPercent').value); var capitalGainsTaxRate = parseFloat(document.getElementById('capitalGainsTaxRate').value); var monthlyRentIncome = parseFloat(document.getElementById('monthlyRentIncome').value); var monthlyMortgageP_I = parseFloat(document.getElementById('monthlyMortgageP_I').value); var monthlyPropertyTaxes = parseFloat(document.getElementById('monthlyPropertyTaxes').value); var monthlyHomeInsurance = parseFloat(document.getElementById('monthlyHomeInsurance').value); var monthlyHOAFees = parseFloat(document.getElementById('monthlyHOAFees').value); var annualMaintenancePercent = parseFloat(document.getElementById('annualMaintenancePercent').value); var vacancyRatePercent = parseFloat(document.getElementById('vacancyRatePercent').value); var propertyManagementPercent = parseFloat(document.getElementById('propertyManagementPercent').value); var annualAppreciationRate = parseFloat(document.getElementById('annualAppreciationRate').value); var investmentReturnRate = parseFloat(document.getElementById('investmentReturnRate').value); var timeHorizonYears = parseFloat(document.getElementById('timeHorizonYears').value); // Validate inputs if (isNaN(currentPropertyValue) || isNaN(outstandingMortgage) || isNaN(originalPurchasePrice) || isNaN(yearsOwned) || isNaN(sellingCostsPercent) || isNaN(capitalGainsTaxRate) || isNaN(monthlyRentIncome) || isNaN(monthlyMortgageP_I) || isNaN(monthlyPropertyTaxes) || isNaN(monthlyHomeInsurance) || isNaN(monthlyHOAFees) || isNaN(annualMaintenancePercent) || isNaN(vacancyRatePercent) || isNaN(propertyManagementPercent) || isNaN(annualAppreciationRate) || isNaN(investmentReturnRate) || isNaN(timeHorizonYears) || timeHorizonYears 0) ? capitalGain * capitalGainsTaxFactor : 0; var cashAfterSale = netProceedsBeforeMortgageAndTax – outstandingMortgage – capitalGainsTax; // Ensure cashAfterSale is not negative if selling costs + mortgage + tax exceed value if (cashAfterSale < 0) { cashAfterSale = 0; // Or handle as a loss scenario if needed, but for simplicity, assume no cash out of pocket for this comparison } var futureValueIfInvested = cashAfterSale * Math.pow(1 + investmentReturnFactor, timeHorizonYears); // — Rent Scenario Calculation — var annualGrossRent = monthlyRentIncome * 12; var annualVacancyCost = annualGrossRent * vacancyRateFactor; var annualPropertyManagementCost = (annualGrossRent – annualVacancyCost) * propertyManagementFactor; var annualMaintenanceCost = currentPropertyValue * annualMaintenanceFactor; // Based on current value var annualMortgageP_I = monthlyMortgageP_I * 12; var annualPropertyTaxes = monthlyPropertyTaxes * 12; var annualHomeInsurance = monthlyHomeInsurance * 12; var annualHOACost = monthlyHOAFees * 12; var annualOperatingExpenses = annualMortgageP_I + annualPropertyTaxes + annualHomeInsurance + annualHOACost + annualMaintenanceCost + annualPropertyManagementCost + annualVacancyCost; var annualNetCashFlow = annualGrossRent – annualOperatingExpenses; var totalAccumulatedCashFlow = annualNetCashFlow * timeHorizonYears; var futurePropertyValue = currentPropertyValue * Math.pow(1 + annualAppreciationFactor, timeHorizonYears); // For the rent scenario, we compare the accumulated cash flow plus the net equity at the end. // We simplify remaining mortgage by assuming the initial outstanding mortgage is the liability against the future property value. // This is a simplification as the mortgage principal would decrease over time. var rentOptionTotalValue = totalAccumulatedCashFlow + (futurePropertyValue – outstandingMortgage); // — Display Results — var resultDiv = document.getElementById('result'); var outputHTML = '

Comparison Results Over ' + timeHorizonYears + ' Years:

'; outputHTML += '

Selling Option:

'; outputHTML += 'Net Cash Received Today (after selling costs, mortgage, and tax): $' + cashAfterSale.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; outputHTML += 'Projected Value of Sale Proceeds (if invested): $' + futureValueIfInvested.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; outputHTML += '

Renting Option:

'; outputHTML += 'Total Net Cash Flow from Renting (over ' + timeHorizonYears + ' years): $' + totalAccumulatedCashFlow.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; outputHTML += 'Projected Future Property Value: $' + futurePropertyValue.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; outputHTML += 'Estimated Net Financial Benefit (Accumulated Cash Flow + Future Equity): $' + rentOptionTotalValue.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ''; outputHTML += '

Recommendation:

'; if (futureValueIfInvested > rentOptionTotalValue) { outputHTML += 'Based on these calculations, Selling and Investing appears to be the more financially beneficial option over ' + timeHorizonYears + ' years.'; } else if (rentOptionTotalValue > futureValueIfInvested) { outputHTML += 'Based on these calculations, Renting Out Your Property appears to be the more financially beneficial option over ' + timeHorizonYears + ' years.'; } else { outputHTML += 'The financial outcomes for both options are very similar over ' + timeHorizonYears + ' years.'; } resultDiv.innerHTML = outputHTML; } .calculator-container { font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif; max-width: 700px; margin: 20px auto; padding: 25px; background: #f9f9f9; border-radius: 10px; box-shadow: 0 4px 12px rgba(0, 0, 0, 0.1); border: 1px solid #e0e0e0; } .calculator-container h2 { text-align: center; color: #333; margin-bottom: 20px; font-size: 28px; } .calculator-container h3 { color: #0056b3; margin-top: 25px; margin-bottom: 15px; font-size: 22px; border-bottom: 2px solid #007bff; padding-bottom: 5px; } .calculator-container p { color: #555; line-height: 1.6; margin-bottom: 15px; } .calc-input-group { background: #ffffff; border: 1px solid #e9e9e9; border-radius: 8px; padding: 20px; margin-bottom: 20px; box-shadow: 0 2px 5px rgba(0,0,0,0.05); } .calc-input-group label { display: block; margin-bottom: 8px; color: #333; font-weight: bold; font-size: 15px; } .calc-input-group input[type="number"] { width: calc(100% – 22px); padding: 10px; margin-bottom: 15px; border: 1px solid #ccc; border-radius: 5px; font-size: 16px; box-sizing: border-box; -moz-appearance: textfield; /* Firefox */ } .calc-input-group input[type="number"]::-webkit-outer-spin-button, .calc-input-group input[type="number"]::-webkit-inner-spin-button { -webkit-appearance: none; margin: 0; } button { display: block; width: 100%; padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 5px; font-size: 18px; cursor: pointer; transition: background-color 0.3s ease; margin-top: 20px; } button:hover { background-color: #0056b3; } .calc-result { margin-top: 30px; padding: 20px; background-color: #eaf6ff; border: 1px solid #b3d9ff; border-radius: 8px; font-size: 16px; color: #333; } .calc-result h3 { color: #0056b3; margin-top: 0; border-bottom: 1px solid #b3d9ff; padding-bottom: 10px; margin-bottom: 15px; font-size: 24px; } .calc-result h4 { color: #007bff; margin-top: 20px; margin-bottom: 10px; font-size: 18px; } .calc-result p { margin-bottom: 8px; } .calc-result p strong { color: #0056b3; }

Understanding the Sell vs. Rent Decision

The choice between selling your property and renting it out is a significant financial decision with long-term implications. It's not just about immediate cash flow but also about asset growth, liabilities, and your personal financial goals. This calculator aims to provide a clear financial comparison over a chosen time horizon.

Key Factors in Selling

Current Property Value: This is the market price you could realistically get for your home today.
Outstanding Mortgage Balance: The remaining debt on your property that must be paid off upon sale.
Original Purchase Price & Years Owned: These are crucial for determining potential capital gains, which might be subject to tax.
Selling Costs: These typically include real estate agent commissions, closing costs, legal fees, and potential repair costs to prepare the home for sale. These can significantly reduce your net proceeds.
Capital Gains Tax: If you sell your property for more than you bought it for (after accounting for selling costs and improvements), you might owe capital gains tax on the profit. The rate depends on how long you've owned the property and your income bracket.
Investment Return Rate: If you sell, the net cash you receive can be invested elsewhere. This rate represents the potential annual return you could earn on those invested funds.

Key Factors in Renting

Expected Monthly Rent Income: The amount you can realistically charge tenants each month. Research local rental markets thoroughly.
Monthly Mortgage P&I Payment: The principal and interest portion of your existing mortgage. This is a fixed cost you'll continue to pay.
Monthly Property Taxes & Home Insurance: Ongoing costs of ownership that don't disappear when you rent out the property.
Monthly HOA Fees: If your property is part of a homeowners' association, these fees are a recurring expense.
Annual Maintenance Costs: As a landlord, you're responsible for repairs and upkeep. It's wise to budget a percentage of the property's value annually for these costs.
Annual Vacancy Rate: Properties are rarely occupied 100% of the time. Account for periods when your property might be empty between tenants, leading to lost income.
Property Management Fees: If you hire a property manager, they will charge a percentage of the monthly rent for their services (e.g., finding tenants, collecting rent, handling maintenance requests).
Annual Property Appreciation Rate: While renting, you retain ownership of the property, which may continue to increase in value over time.

Making Your Decision

The calculator provides a "Net Financial Benefit" for both scenarios over your chosen time horizon. For the selling option, this is the projected future value of your net sale proceeds if invested. For the renting option, it combines the total accumulated net cash flow from renting with the estimated future equity in the property (future value minus the initial outstanding mortgage balance, as a simplified proxy for liability).

Remember that this calculator provides a financial projection. Personal factors like your desire to be a landlord, market volatility, and unforeseen expenses can also influence your decision. Always consult with financial and real estate professionals for personalized advice.