Rent it out, or sell it?
Compare holding a property and letting it against selling now and investing the proceeds, over a horizon the owner chooses.
Your numbers
| Net proceeds if sold todayValue less selling costs, loan and indicative tax. | — |
| Property value at the horizon | — |
| Net rent collected over the period | — |
| Appreciation at which the two are equalBelow this rate, selling wins on these numbers. | — |
An owner who has moved away, inherited a flat, or upgraded and kept the old one asks this constantly, and usually decides on sentiment.
The arithmetic is straightforward: holding produces net rent plus whatever the property appreciates, less the costs of ownership. Selling produces a lump sum, after brokerage and tax, that can earn a return elsewhere.
An agent who works this honestly — including the cases where selling loses — is the agent that owner calls when they finally do transact.
What is being compared
Hold and let: net rent each year, growing with the market, less ownership costs and any EMI, plus the property's value at the end of the horizon after selling costs and the remaining loan.
Sell and invest: today's value less selling costs, loan and tax, compounded at whatever the owner would realistically earn elsewhere.
The output that matters most is the last one: the appreciation rate at which the two choices are equal. It converts an argument about opinions into a single testable number.
Worked example
₹80 lakh flat, ₹22,000 rent, ₹90,000 of annual costs, no loan, 2% selling cost, ₹4 lakh indicative tax, alternative return 7%, ten-year horizon.
Selling nets about ₹74.4 lakh today, which at 7% becomes roughly ₹1.46 crore in ten years. Holding at 5% appreciation gives a property worth about ₹1.3 crore, plus roughly ₹22 lakh of net rent collected along the way — a comparable outcome, decided almost entirely by the appreciation assumption.
Which is why the break-even appreciation number is the one to quote. If it comes out at 6% and the owner does not believe the area will do 6%, they have their answer.
What the model leaves out
Tax on rental income, the hassle of managing a tenant, the risk of a bad one, and the concentration risk of holding a large single asset. All of those push in the same direction, and none are in the arithmetic.
A model, not advice. Tax treatment of both rental income and capital gains depends on the individual — send them to a chartered accountant.
Questions
Does this include tax on rental income?
No. Rental income is taxable and the treatment depends on the owner's slab and what deductions apply, so including a single number would mislead. Treat the hold case as slightly optimistic.
Why does the break-even appreciation matter more than the verdict?
Because appreciation is the assumption nobody knows. A verdict that flips between 4% and 6% is not really a verdict — but knowing the pivot point lets the owner decide using their own view of the area.
Should an agent recommend selling?
Only where the numbers support it, and always saying which assumption is doing the work. An owner who is told plainly that holding looks better remembers it, and comes back when circumstances change.
The number convinces. The reel gets you the call.
Buyers who run these numbers are ready to talk. PropVid turns a listing into a reel in under two minutes — 700+ templates, AI scripts, voiceover, and your logo and phone on every export.
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