Rent or Sell? Rental Break-Even Calculator
Set rental cash against a hypothetical sale, down payment and purchase costs included, for your earliest payback month and net result over any period.
What This Calculator Does
This estimate shows roughly how long it takes for the rent you collect, combined with the proceeds of a hypothetical sale, to return the cash you started with. Your inputs cover buying costs that won't come back to you, repairs made right after purchase, rent you really receive and what it costs to run the place, plus your own guesses about value and selling. A loan is optional; add one only if your purchase uses one. Every recovery figure is built on the idea that you sell. The first month your cash is recovered and the net for the month you select are two different numbers. No result accounts for income tax.
Who Is This For
It works for rental buyers, owners and real estate professionals testing a specific buy-and-sell scenario. Use the cash you really started with and every operating cost you expect. A modeled gain depends on selling, not on rent alone. It isn't a loan approval, a market forecast or a promised return.
How It Works
Start with the price, the down payment and the cash you spent at purchase. Buying with cash? Make the down payment match the price and leave rate and term blank. If you financed, enter the fixed note rate and the loan length. Next, add the monthly rent you receive and your operating expenses. Enter selling costs as a percentage and the yearly value change with a + or − sign. Choose a holding period of 1–600 whole months and press Calculate. The results set your upfront cash against rental cash flow and sale cash after the loan is repaid. They also show the earliest break-even month and your gain or loss over the period.
Frequently Asked Questions
What does break-even mean here?
It's the earliest month-end where your rental cash and your sale cash together reach at least your down payment plus the nonrefundable cash you spent buying. Rental cash is what rent leaves after operating costs and loan payments, summed month by month. Sale cash is what remains after selling costs and the loan payoff. So this is not a rent-only break-even. Landing at exactly zero means your money came back, not a profit. Your gain or loss for the chosen period and its status appear separately. Income taxes, discounting and loan eligibility are left out of the math.
How do acquisition costs delay your recovery month?
They push it later, because they're added once to the cash you start with. Take a $300,000 cash purchase at a flat value that clears $1,500 monthly after operating costs and carries no acquisition costs. With a 6% selling allowance, rent covers the $18,000 sale cost by month 12. Put $12,000 of nonrefundable acquisition cash in, and recovery moves to month 20. The net gain at month 24 then comes to $6,000. The figures are illustrations, not fee quotes. Don't enter deposits credited back to you, fees financed into the loan, reserves you'll recover, or anything counted twice.
Can I break even in the first year?
Yes, you can break even within the first year. Picture a $500,000 cash purchase at a flat value, with a 6% selling allowance. There are no acquisition or operating costs, and $5,000 in rent comes in each month. That covers the $30,000 of selling friction by month 6. Because the tool checks monthly, it doesn't present month 6 as exactly one year. At that point the net is $0, so your cash is back but there's no profit yet. Month 12 brings the net to $30,000. Every rent and cost figure here is a hypothetical input.
Can my rental lose money monthly and still come out ahead after a sale?
Yes, at the same time. Suppose a hypothetical $300,000 purchase: $60,000 down, $240,000 financed at 0% for 10 years, $2,000 of rent against $1,000 of operating costs, a flat value and no acquisition or selling costs. With a $2,000 loan payment, rental cash runs −$1,000 a month, so after 6 months it sits at −$6,000. Selling then would bring in $72,000 after paying off the $228,000 balance; add the −$6,000 of rental cash and subtract your $60,000, and you're $6,000 ahead. Those monthly shortfalls still come out of your pocket. The 0% rate only tests the math; it isn't a loan you can get.
What happens if I hold past the loan term?
Past the loan term, payments stop at payoff, but rent and operating costs keep running. Say you have a hypothetical $300,000 property with $60,000 down, $10,000 in acquisition cash and a 10-year loan at 0%, with $3,000 of rent and $1,000 of operating costs, a flat value and 6% selling costs. Hold it 144 months and the model charges only 120 loan payments of $2,000, or $240,000 in total. Rent and expenses still count every month, but no loan payment falls in the last 24 months. The debt left at the sale is 0. The modeled net gain comes to $260,000.
Does the calculator look past my chosen period or start at month zero?
No to both. It checks each month-end from month 1 through the number of whole months you select, without interpolating between them and without saying anything about month zero. If your cash would be covered in month 20 but you chose 12 months, you'll see no recovery within the period. With a flat value and nothing entered for debt, rent, expenses or purchase and sale costs, month 1 is just the earliest month where the totals match exactly, and that isn't a profit. If real conditions drift from your assumptions, a projected recovery may not happen.
Can I model a falling price or sale cash below zero?
Yes, falling values and negative sale cash can both be modeled. The annual value change runs from −15% to 15%, including 0, and it compounds monthly. Say you pay $300,000 in cash, with no purchase costs, a value change of −10% a year, 6% selling costs and net monthly cash of $1,500 after costs. By month 24 the property has a value of $243,000, with a net of −$35,580. Financed deals can also end with negative sale cash after the payoff. In that case the shortfall isn't forgiven, and you pay the difference in. These are scenarios, not price forecasts.
How precise is the result, and what's missing?
Loan payments and the value path are computed exactly, so they won't always match a lender's rounded statement. Status and break-even month run on the unrounded gain. A $0 on screen may hide a small gain or loss. To make sale cash plus rental cash flow minus upfront cash equal the net gain shown, a rounding adjustment is added; it is not a fee. The calculator's fixed inputs leave out taxes on income and capital gains, NPV and IRR, inflation and rising rents, and also lender review and guarantees. Your note rate and the APR are different things.