Keep Your Home vs. Rent Calculator
If you already own a home, this calculator helps you decide whether to keep it or sell it and rent instead. It compares your ongoing cost of ownership against renting, and shows how investing the sale proceeds would grow over time versus staying in your home.
What This Calculator Does
This calculator is for people who already own a home and are weighing whether to sell it and rent instead - a common consideration heading into or during retirement. It compares two paths: staying in your home and continuing to pay property taxes, insurance, and maintenance, versus selling, investing the proceeds, and paying rent.
The result is a year-by-year comparison showing which option leaves you financially better off at each age. The key variable is what you'd earn by investing your sale proceeds versus the ongoing costs you'd avoid - or take on - depending on which path you choose.
This decision interacts with other retirement planning choices. Selling your home generates a lump sum that may have tax implications - the Roth conversion calculator can help you model how those proceeds affect your tax picture. If you have a pension, the pension & lump sum calculator can help you see how your income sources hold up under either housing scenario.
When This Matters
- You're approaching retirement and weighing whether to sell your home and rent
- You want to downsize but aren't sure if renting makes more financial sense than buying smaller
- You want to understand how home ownership costs compare to what rent would cost in your target area
- You want to see how investing your sale proceeds would grow relative to the equity you'd give up
- You want to factor your housing decision into your broader retirement cash flow plan
How to Use This Calculator
- Enter the age at which you expect to sell your home
- Enter the expected net proceeds from the sale (after agent fees, closing costs, etc.)
- Enter your current monthly home ownership costs - property tax, insurance, and maintenance
- Enter what you'd pay monthly if you rented instead, including utilities
- Set an expected investment return on the sale proceeds
- Review the chart to see which path comes out ahead at each age
Frequently Asked Questions
What does "net proceeds" mean and what should I enter?
Net proceeds are what you walk away with after selling - the sale price minus any remaining mortgage balance, agent commissions (often 5-6%), and closing costs. If your home is worth $500,000 and you owe $100,000, your gross equity is $400,000. Subtract selling costs of roughly $30,000 and your net proceeds would be around $370,000. A primary-residence sale is usually tax-favored too: the Section 121 exclusion shields up to $250,000 of gain for single filers and $500,000 for married couples, so most sellers owe no capital-gains tax - if your gain exceeds those limits, subtract the tax on the excess from your net proceeds as well.
What does "opportunity cost" mean here?
Opportunity cost refers to the return you could earn by investing your sale proceeds instead of keeping them tied up in home equity. If you sell and invest $370,000 at 6% annually, that grows significantly over a 20-year retirement. This calculator shows how that invested amount compares to the value of staying in your home over time.
Is renting in retirement always the wrong choice?
Not at all. Renting offers flexibility, predictable cash flow, and eliminates the risk of large unexpected repair costs. For some retirees - especially those in high-value homes with lower rent alternatives nearby - selling and renting can free up significant capital that generates more income than the home costs to maintain.
How do property taxes and maintenance factor in?
Property taxes, insurance, and maintenance are real ongoing costs of homeownership that don't build equity. Property taxes typically run 0.5-2% of home value per year depending on your state and municipality. Maintenance averages about 1% of home value annually. These costs are factored into the ownership side of the comparison.
What investment return should I assume for the sale proceeds?
A commonly used range for a balanced retirement portfolio is 5-7% annually. If you'd invest more conservatively in retirement - heavier in bonds or cash - a lower return like 4-5% may be more realistic. Try a few different values to see how sensitive the comparison is to your assumed return rate.
Does this calculator account for home appreciation?
This calculator focuses on the cash flow and investment comparison from a specific sale date forward - it does not model ongoing home appreciation after the sale age you enter. If you plan to hold your home for many more years before selling, home appreciation during that holding period is a separate consideration not captured here.