Rent vs Sell Calculator: Should You Sell or Rent Out Your House?

Compare selling now with renting it out

Enter your home's value, what's left on the mortgage and the rent you'd charge. The calculator follows both paths for the same number of years. Sell now: the cash left after selling costs and the mortgage payout, invested at the return you choose. Rent, then sell: rent in, mortgage and running costs out, tax on the rental income each year, then the sale at the end, less selling costs, the mortgage left and an estimate of capital gains tax. Open "More assumptions" to change the mortgage rate, property tax, upkeep, empty months, how you'd find tenants and how you'd sell.

Should I sell or rent my house? The short answer

Renting out your house usually comes out ahead only when the home's value keeps rising and you can afford the monthly top-up. In Ontario the rent rarely covers the mortgage, property tax, insurance and repairs on a home bought in the last few years, so most owners who rent out put money in every month and are betting on the price going up.

In the calculator's example (an $800,000 home with $450,000 left on the mortgage, rented for $3,200 a month for 5 years), the owner tops up about $1,100 a month in the first year. Whether that pays off depends almost entirely on the home's growth:

What the calculator counts

• Selling costs, both times: the listing fee (a flat fee or an agent's percentage), the buyer agent's commission you offer either way, 13% HST on both, and the lawyer.
• The mortgage: a Canadian fixed-rate payment (interest compounded twice a year), so the balance shrinks while the tenant pays.
• Running costs: property tax, landlord insurance, condo fees, repairs and upkeep as a share of the value, and empty months between tenants.
• Finding tenants: a flat fee MLS® lease listing, or a leasing agent's usual fee of one month's rent, every time a tenant changes.
• Tax on the rent: each year's rent less mortgage interest and running costs, taxed at your marginal rate. Principal isn't deductible. A loss lowers the tax on your other income.
• What the cash would earn: if you sell, the cash is invested; if you rent, every surplus is invested and every top-up comes out of savings that would otherwise earn the same return.

Capital gains when you rent out your home

Your home is tax-free when you sell it as your principal residence. Once you move out and rent it, the years it's rented normally stop counting, so part of the later gain becomes taxable. The Canada Revenue Agency lets you file an election under subsection 45(2) so the home can stay your principal residence for up to four tax years while it's rented, as long as you don't claim depreciation (capital cost allowance) on it and you report the rental income (CRA Income Tax Folio S1-F3-C2, ¶2.50).

The tax-free share of the gain is (1 + the years designated) ÷ the years owned (¶2.20 of the same folio). Lived there 6 years and rented 5: (1 + 6 + 4) ÷ 11 = 100% tax-free. Rented 10 years instead: (1 + 6 + 4) ÷ 16, so 31% of the gain is taxable, and half of that (the inclusion rate stayed at one-half after the 2025 increase was cancelled) is added to your income. One catch: you can only designate one home a year, so if you buy a new home to live in, those years can't count for both.

When selling now usually wins

• Prices are flat where you live, or you expect them to be for the next few years.
• The top-up hurts: the rent is well below the mortgage plus costs, and the money would otherwise go into an RRSP, a TFSA or paying down your next home.
• You'd rent it for many years: past about 5 rented years capital gains tax starts to apply, and it grows every year after.
• You don't want to be a landlord: repairs, a tenant who stops paying and the Landlord and Tenant Board are real costs the numbers don't show.
• You need the down payment for your next home now.

When renting it out can make sense

• A low mortgage rate locked in for years, or a small balance, so the rent covers more of the costs.
• You'll likely move back or sell within about 5 years, so the principal residence election can keep the whole gain tax-free.
• A newer unit: rentals first occupied after November 15, 2018 aren't held to Ontario's yearly rent increase guideline (2.1% for 2026), so the rent can follow the market between tenants.
• A market that's down right now: renting for a couple of years can beat selling at a low price, if you can carry the top-up.

Either way, list it yourself on MLS®

Whichever answer you get, a flat fee MLS® listing keeps more of it. Selling: your home goes on the MLS® System and realtor.ca for a flat fee instead of a listing agent's percentage; you still choose what to offer the buyer's agent. Renting: list it for lease on the MLS® System for less than a leasing agent's one month's rent, every time it comes up. Offers and inquiries come straight to you; listings are with Robin Hood Realty Limited, Brokerage. Plans start at $69.99 a month, or $99.99 for 2 months.

Buying a rental instead? The cap rate calculator shows its cap rate and monthly cash flow before you buy.

Questions

Flat fee MLS® prices

Plus 13% HST on Ontario listings; no tax on Alberta listings. The monthly plan can be cancelled any time.

Renting it out? Lock in today's price for the next tenants

A rental comes back to the market every time a tenant moves out. Buy listing credits in My Account after your first listing: 2 credits save 10%, 3 save 25%. Credits never expire, keep today's price and work on any property, for rent or for sale.

Plus 13% HST on Ontario listings. Codes like FREEUPGRADE don't apply to bundles. Already listed with us? Buy credits in My Account.

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