Keep the house as a rental or sell it? The math and the rules in Florida and Arizona

You are moving out, and the house is paid down enough that renting it out sounds like a plan. The rent would cover the mortgage, and you keep the house. That can work. It can also take hours of your time each month and still lose money.

The way to decide is to do the numbers the way a landlord does: rent in, every cost out, then compare what is left with what the same money could do for you if you sold. This post gives you that worksheet, then the rules that change in Florida and Arizona the day the house becomes a rental. It explains how the rules work. It gives no tax, legal or financial advice, so check your own case with a tax adviser and a lawyer.

Step 1: the monthly worksheet

Write down each line for your house. Use real quotes where you can.

Line	Where to find it
Rent	Rents asked for houses like yours, same size and area, in the last few months
Mortgage payment (principal and interest)	Your monthly statement
Property tax	Your next bill as a rental, which can be higher than today's (see Step 3)
Insurance	A quote for a landlord policy, since a policy for a home you live in may not fit a rental
HOA dues	Your HOA statement, and the HOA's rules on renting
Repairs and replacements	A monthly amount set aside for the roof, the air conditioner, the water heater and the rest
Empty months	Rent you will not collect between tenants
Management	A manager's fee, or your own hours if you do it yourself

Then subtract: rent minus every cost line. What is left is your monthly cash flow.

An example with made-up numbers

These numbers are made up to show how the math works. They describe no real house. Put in your own.

Line	Monthly amount
Rent	$2,200
Mortgage payment	$1,150
Property tax	$350
Landlord insurance	$250
Repairs set-aside (8% of rent)	$176
Empty months set-aside (5% of rent)	$110
Management (10% of rent)	$220
Total costs	$2,256
Cash flow	minus $56

The rent "covers the mortgage" with $1,050 to spare, and the house still loses $56 a month once every cost is counted. That is why every line goes in the worksheet.

The money that stays in the house

There is a second question the worksheet does not show. Say the example house would sell for $350,000, and you owe $180,000. After the sale costs, a large part of the $170,000 difference is money you could have in the bank. Keeping the house as a rental keeps that money in the house.

Ask what that money could do for you instead: pay off other debt, buy your next home, or sit in savings or bonds. A financial adviser can compare the after-tax return of each choice with the rental's cash flow. The net proceeds calculator shows what you would keep from a sale today.

Step 2: the home sale tax break and its clock

When you sell a home you lived in, federal tax law lets you leave part of the profit out of your income. IRS Publication 523 sets the rules:

• You can exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly.
• You must have owned the home for at least 24 months of the 5 years before the sale.
• You must have lived in it as your main home for at least 24 months of those 5 years. The months do not need to be in a row.

Renting the house starts a clock. If you lived there 2 years and then moved out, you have up to 3 more years to sell and still pass the test. After that, the exclusion is gone.

Publication 523 also says that rental time after the last date you lived in the house, inside that 5-year period, does not count as "nonqualified use" that would cut the exclusion.

Depreciation follows you to the sale

A rental house is depreciated, which lowers your taxable rent each year. IRS Publication 527 says residential rental property is depreciated over 27.5 years. For a home you used to live in, depreciation starts from "the lesser of its adjusted basis or its FMV" on the day it became a rental.

When you sell, Publication 523 says "you can't exclude the part of your gain equal to any depreciation allowed or allowable" after May 6, 1997. So even inside the 3-year window, the depreciation part of your gain is taxed. Ask a tax adviser to run both numbers: selling now, and selling after a few years of rent.

Step 3: property tax in Florida

In Florida, a home you live in can carry a homestead exemption and the Save Our Homes cap. Renting the house out can end both.

Florida Statutes section 196.061 says that renting all or substantially all of a homestead dwelling counts as abandoning it as a homestead. Renting after January 1 does not affect that year's exemption "unless the property is rented for more than 30 days per calendar year for 2 consecutive years."

The cap goes with the exemption. Section 193.155 limits each year's increase in a homestead's assessed value to the lower of 3 percent or the change in the Consumer Price Index. Subsection (6) says "only property that receives a homestead exemption is subject to this section."

A rental house falls under section 193.1554, which covers nonhomestead residential property with nine or fewer units. Its assessed value can go up as much as 10 percent a year.

If you have owned your home for many years, your assessed value may be far below what the house would sell for. Ask your county property appraiser what your tax bill would be once the house is a rental, and put that number in the worksheet.

Step 4: property tax and registration in Arizona

Arizona sorts property into classes. Arizona Revised Statutes section 42-12003 puts a house "occupied by the owner as the owner's primary residence" in class three. Section 42-12004 puts residential property that is leased or rented in class four.

The class matters because of the homeowner rebate in section 15-972. For class three homes, the state pays part of the school district primary tax, up to $600 per parcel. A rented house in class four does not get it.

Arizona also asks landlords to register. Section 33-1902 says an owner of residential rental property must keep this on file with the county assessor:

• The owner's name, address and phone number
• The street address and parcel number of the house
• The year the building was built

Changes must be filed within ten days. An owner who lives outside Arizona must name and record a statutory agent who lives in the state.

Step 5: your duties as a landlord

A tenant has rights that state law protects, and a landlord has deadlines. A few of the main ones:

Rule	Florida	Arizona
Security deposit limit	Read section 83.49	Not more than one and one-half month's rent (section 33-1321(A))
Holding the deposit	Separate account in a Florida financial institution, or a surety bond (section 83.49(1))	Read section 33-1321
Returning the deposit	Within 15 days if no claim, or written notice of a claim within 30 days (section 83.49(3)(a))	Within fourteen days, not counting weekends and legal holidays, after the tenancy ends and the tenant asks (section 33-1321(D))
Notice for unpaid rent	3 days, not counting Saturday, Sunday and legal holidays (section 83.56(3))	Five days after written notice (section 33-1368(B))

Read the full sections for Florida 83.49, Florida 83.56, Arizona 33-1321 and Arizona 33-1368 before you sign a lease. A mistake on a deposit or a notice can cost you money or delay an eviction.

Two more calls to make before you rent: your mortgage lender, because your loan papers may have an occupancy section that requires you to live in the house for a set time, and your HOA, because some HOAs limit rentals.

When renting makes sense, and when selling does

Renting tends to work when:

• The worksheet shows money left over each month after every cost, including repairs and empty months.
• You have savings for a large repair, such as an air conditioner or a roof, without borrowing.
• You live close enough to handle problems, or you have a manager you trust.
• You plan to come back to the house, or a family member will.

Selling tends to work when:

• The worksheet shows a loss, or a gain so small that one repair erases a year of it.
• Your property tax would jump once the homestead or the class three rebate ends.
• You are inside the 3-year window for the home sale tax break and would pass the 2 of 5 year test today.
• You need the money in the house for your next home.

If you already rent the house and want out, our page for tired landlords explains your options, and our post on selling a rented house covers tenant notice and showings in both states.

How BIMINIO buys rental houses

We buy houses for cash in Tampa, Miami, Orlando, Lakeland, Phoenix and Glendale. That includes houses you are about to move out of, rentals with tenants in place, and rentals that need work after a tenant leaves.

A cash offer is below full market value. In return, there are no repairs and no showings, and the sale does not wait on a mortgage approval. You get a written offer within 24 hours, with the comparable sales we used and proof of funds. You pick a closing date from 7 to 35 days out, and we pay the closing costs. To start, fill in the form on this page, or call us at (813) 729-8998 in Florida or (602) 387-7772 in Arizona.

Sources

• IRS Publication 523 (2025), Selling Your Home, read November 9, 2026
• IRS Publication 527 (2025), Residential Rental Property, read November 9, 2026
• Florida Statutes (2026), section 196.061: rental of homestead to constitute abandonment, read November 9, 2026
• Florida Statutes (2026), section 193.155: homestead assessments, Save Our Homes, read November 9, 2026
• Florida Statutes (2026), section 193.1554: assessment of nonhomestead residential property, read November 9, 2026
• Arizona Revised Statutes, section 42-12003: class three property, read November 9, 2026
• Arizona Revised Statutes, section 42-12004: class four property, read November 9, 2026
• Arizona Revised Statutes, section 15-972: homeowner's rebate, read November 9, 2026
• Arizona Revised Statutes, section 33-1902: registration of residential rental property, read November 9, 2026
• Florida Statutes (2026), section 83.49: deposit money or advance rent, read November 9, 2026
• Florida Statutes (2026), section 83.56: termination of rental agreement, read November 9, 2026
• Arizona Revised Statutes, section 33-1321: security deposits, read November 9, 2026
• Arizona Revised Statutes, section 33-1368: noncompliance with rental agreement, failure to pay rent, read November 9, 2026

Situations this helps with

• Relocating or job change
• Tired landlord, problem tenants

Guides

• Cash offer vs listing: the costs
• What happens at closing
• Selling a house after you move away
• Selling as is: what to tell the buyer
• Property taxes when you sell
• Selling a rental with tenants

This post is general information. BIMINIO does not give legal, tax or financial advice.