One of the most common questions real estate clients ask is simple but loaded: “Should I rent my house, sell it, or refinance?” If you can’t back your answer with real numbers, you’re just guessing, and your clients deserve better. Here’s how to use a calculator to give them a precise, confident recommendation every time.
Getting Started: The Inputs That Matter
Head to the Cash Flow Notepad calculator and start by entering the basics:
- Purchase price – What did the client pay for the property?
- Down payment – Did they finance, or pay cash? (A 100% down payment means no financing.)
- Rehab cost – How much went into fixing up the house?
In the example walkthrough, a client bought a house for $85,000 with no financing and spent $45,000 on rehab. Those three numbers form the foundation for every scenario that follows.
Scenario 1: Renting the Property
Plug in the rental assumptions:
- Interest rate (e.g., 7% on a 30-year mortgage)
- Current market rent (e.g., $1,850/month)
- Operating expenses – Property tax, HOA, insurance, repairs, property management
Tip: Don’t overestimate expenses. The more accurate your inputs, the more reliable your output.
If the client plans to Airbnb the property, there’s a dedicated section for short-term rental costs: cleaning, internet, utilities, pool maintenance, and more.
The calculator then generates:
- Total expenses
- Annual and monthly cash flow
- Cash-on-cash return – The key metric for rental evaluation
Cash-on-cash return isn’t the only number that matters (you also have appreciation and depreciation), but it’s one of the most important for a quick, clear comparison.
Scenario 2: Selling the Property
As a real estate agent, you can comp the house and estimate its market value. In today’s buyer’s market, expect some downward pressure on price.
Enter the estimated sale price and the associated costs:
- Listing commission (2–3% depending on volume/investor relationships)
- Title fees (get these from your title rep)
- Seller credits (always expect some in today’s market)
- Repair credits
- Escrow fees
- Property tax (prorated based on time of year)
- Existing mortgage payoff and other lending costs
The calculator outputs:
- Total selling and holding costs
- Net cash to seller – How much actually lands in their pocket
- Projected profit (sale price minus purchase price and rehab)
Important: This is gross profit, not net of income tax. If the client has held the property less than a year, they’ll face short-term capital gains rates. If longer, they qualify for long-term capital gains. Factor that in before giving a final recommendation.
Scenario 3: Refinancing or BRRRR
For clients who want to keep the property and pull equity out, the refinance section covers:
- After-repair value (ARV)
- Loan-to-value (LTV) ratio – The sweet spot is around 65%. Go higher and you’ll pay more in fees; go lower and you’re leaving too much equity trapped in the house.
- Refinance closing costs – Appraisal, loan origination, underwriting, processing fees
- Existing loan payoff
The calculator then shows:
- New loan amount
- Cash back at refinance
- Money left in the deal – A critical number for BRRRR investors
In the example, the purchase price was low enough that no money was left in the deal, making the cash-on-cash return essentially infinite. But that also means zero buffer—if insurance goes up or repairs hit, the client is exposed.
Pro tip: If the calculator shows $0 left in the deal, consider lowering the LTV to 60% to build in a cushion. A small safety margin is worth the reduced cash-out.
The Bottom Line
The beauty of this calculator is that it lays out all three scenarios side by side:
- Rent – Monthly cash flow and cash-on-cash return
- Sell – Net proceeds and gross profit
- Refinance/BRRRR – Cash pulled out and money remaining in the deal
When your client asks, “Should I rent, sell, or refinance?” you don’t have to improvise. Run the numbers, show them the output, and let the data do the talking. That’s how you turn a vague question into a confident, professional recommendation.
Click on the image so you can watch the Rent, Sell, or Refinance Calculator Walkthrough.
