Sell vs Keep Property Calculator

About Sell vs Keep Property Calculator

Analyze whether to sell or keep a rental property. This calculator provides instant results with step-by-step explanations to help you understand the calculation process.

How to use this calculator

1. Enter the property's expected sale price and the costs to sell it.
2. Add the remaining mortgage balance, estimated taxes, and any extra exit costs.
3. Compare the net sell result with the value of keeping the property, such as future rent and appreciation.
4. Review the calculator output to see which option leaves you better off financially.

The formula explained

• \(\text{Net Gain from Sell}\) = cash left after selling and paying all related costs
• \(\text{Sale Proceeds}\) = expected selling price of the property
• \(\text{Selling Costs}\) = commissions, fees, and closing costs tied to the sale
• \(\text{Mortgage Payoff}\) = remaining loan balance that must be paid at closing
• \(\text{Taxes}\) = estimated tax owed because of the sale
• \(\text{Other Exit Costs}\) = repairs, penalties, or any additional costs to exit ownership

Step by step method

1. Start with the expected sale price of the property.
2. Subtract all selling-related costs, including commission and closing fees.
3. Subtract the mortgage payoff, taxes, and any other costs required to close the sale.
4. Compare the remaining amount with your expected value from keeping the property.

Worked example

Here is a simple example using a rental property with a realistic sale price and common selling costs.

1. Sale proceeds are \(\$350,000\).
2. Selling costs are \(\$21,000\), mortgage payoff is \(\$180,000\), and other exit costs are \(\$4,000\).
3. Net gain from sell is \(350,000 - 21,000 - 180,000 - 4,000 = 145,000\).

Tips and common mistakes

• Use realistic estimates for commission, closing costs, and taxes, not just the asking price.
• Do not forget the mortgage payoff if the property is still financed.
• If you plan to keep the property, compare the sale result with future rental income, maintenance, and appreciation.
• Check whether taxes or penalties apply before assuming the full sale amount is available.

Frequently asked questions