Rent it or sell it: a 2026 decision framework for Central Florida

Rent the home if you hold a low mortgage rate, the rent covers the full carrying cost with a reserve, and you can hold through a flat market. Sell it if the rent falls short of the carry, your equity would work harder elsewhere, or you are inside the window to exclude the gain as a former primary residence. In November 2026 that trade-off is sharper than usual: Freddie Mac's 30-year rate was 7.24% the week of October 29, home values dipped in every Central Florida county over the past year, and rents are flat to down. Here are the four questions that decide it.

What changed in 2026 that affects this decision?

Three things. First, mortgage rates stayed high. Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed at 7.24% for the week of October 29, 2026, down from 7.32% the week before but well above the 6.17% of a year earlier. Second, home values stopped rising. Zillow's typical home value as of October 16, 2026, per the Momentum Research county scorecards, was $400,964 in Orange (down 0.8% year over year), $400,341 in Seminole (down 0.3%), $359,224 in Osceola (down 2.9%), $360,055 in Lake (down 2.0%) and $342,346 in Brevard (down 0.5%). Third, rents cooled, which the Orlando rent data post covers in detail.

A flat market removes the easy answer. Two years ago an owner could rent at a loss and count on appreciation to cover it. Today the numbers have to work on their own.

Question one: what is your mortgage rate?

This is the question most owners underweight. If you bought or refinanced between 2020 and early 2022, you likely hold a rate between 2.5% and 4%. That loan is an asset, and you cannot take it with you.

Consider a $400,000 Orange County home bought in 2021 with a $300,000 loan at 3.5%. Principal and interest run about $1,347 a month and the balance after five years is roughly $269,000. A buyer purchasing that same home today with 20% down at 7.24% would pay about $2,181 a month in principal and interest on a $320,000 loan. The gap, more than $800 a month, is the value of the rate you already have. Renting keeps it. Selling gives it up.

If you bought in 2023 or 2024 at 6.5% or higher, the rate is not an asset, and selling deserves a real look.

Question two: does the rent cover the carry?

Add principal and interest, property taxes at the non-homestead rate, insurance, HOA dues, and a reserve of about 10% of rent for maintenance and vacancy. Compare that to the rent your home will actually command, not the rent you hope for; a free rental analysis gives you that number from current listings.

Using the same example: $1,347 in principal and interest plus an assumed $650 a month in taxes, insurance and dues is $1,997. Zillow's Observed Rent Index for Orange County was $1,950 through July 2026. Before reserves and any management fee, the home runs about $50 a month short. That looks like a loss until you notice that roughly $560 of each payment is now going to principal, so the tenant is paying down about $6,700 of your loan each year while you cover a small gap. Whether that trade is worth it depends on question three and on what the sale proceeds, about $103,000 after a $269,000 payoff and roughly 7% in selling costs, would earn somewhere else.

Key point: In 2026, a rental in Central Florida that breaks even on cash flow is doing its job through principal paydown and tax shelter, not appreciation. A rental that loses several hundred dollars a month is a bet that values will recover, and the past year gave no evidence for that bet.

Question three: is your home-sale exclusion window still open?

If the home was your primary residence, federal law lets you exclude up to $250,000 of gain, or $500,000 on a joint return, when you sell, provided you owned and lived in it for at least two of the five years ending on the sale date, according to IRS Topic 701. That means you can rent the home for up to about three years and still sell with the exclusion, but once the third anniversary of your move-out passes, the exclusion is gone and the full gain is taxable.

This is the deadline inside the decision. An owner with a large gain who is unsure about being a landlord can rent for two years, watch the market, and still sell inside the window. An owner who drifts past year three without deciding has made the decision by default, and it is the expensive one. Talk to your CPA about depreciation recapture as well, since the depreciation you claim while renting is taxed separately on sale even when the exclusion applies.

Converting a homestead also changes the property tax bill. The Florida Department of Revenue notes that the homestead exemption, worth up to $50,000 off taxable value, and the Save Our Homes assessment limitation apply only while the home is your permanent residence, so expect a higher tax bill once a tenant moves in. Build that into the carry.

Question four: what do taxes and depreciation do to each side?

Renting brings deductions a sale does not: mortgage interest, taxes, insurance, repairs, management fees and depreciation on the building over 27.5 years. For investors buying or improving rentals now, the One Big Beautiful Bill Act, signed July 4, 2025, made 100% bonus depreciation permanent for qualified property acquired and placed in service after January 19, 2025, and IRS Notice 2026-11 issued interim guidance in January 2026, according to EY's summary. Qualified property is generally property with a recovery period of 20 years or less, so it does not cover the house itself. It can cover appliances, flooring, fencing and other components a cost segregation study identifies, and it is most valuable on a purchase or major renovation, not on a home you bought in 2021 and are converting now. Have your CPA confirm what qualifies.

Selling brings the exclusion in question three if the window is open and ordinary capital gains tax if it is not. The Sea Dog Rent vs. Sell calculator shows both paths side by side: you enter home value, price paid, original and current mortgage, rate and payment, taxes and insurance and association charges, monthly rent, an appreciation rate and a holding period, flag whether the home was your primary residence, and it charts your projected wealth under each path year by year, with a slider for the hold period, a capital gains liability table and a downloadable summary.

What this means in Central Florida and on the Space Coast

The sales side is slow but not falling apart. The Orlando Regional REALTOR Association's September 2026 report put the median price at $399,610, down from $402,319 a year earlier, with 12,464 homes on the market, over five months of inventory and 66 days on market. On the Space Coast, the Space Coast Association of REALTORS' September 2026 report showed the single-family median at $380,000, up 0.5%, with 3.5 months of supply. Sellers are getting their homes sold, but not quickly and not above last year's price.

The rent side is similarly flat. Zillow's county rent indexes through July 2026 were $1,950 in Orange, $1,893 in Seminole, $2,026 in Osceola, $2,062 in Lake and $1,887 in Brevard. For most owners with a 2021 loan, those rents cover the carry with little to spare. For owners with a 2023 or 2024 loan, they usually do not.

The owners who rent well in this market are the ones who treat the home as a business: a management fee from 8% of rent is in the budget, a reserve is funded, and the plan runs at least three years. The real cost of self-managing post shows why that fee is usually cheaper than doing it yourself, and the accidental landlord's first 90 days covers the setup.

Next step

Run your own numbers in the Rent vs. Sell calculator before you talk to anyone about listing. It takes about five minutes, and if the rent path wins you can request a professional review of the result from the same page.