Sell or Rent in Florida for 2026? The Insider's Guide to Making the Right Call

Are you asking yourself, “Should I sell my Central Florida home or rent it out?” As we look toward 2026, this is one of the biggest questions I hear from homeowners. Getting the answer wrong can cost you tens of thousands of dollars in profit or unexpected taxes. This isn’t a decision to take lightly. It truly depends on your specific financial goals, your lifestyle, and the local market conditions right here in Florida.

Let’s walk through the numbers and the rules to help you make the right call, positioning you for a stress-free and profitable next chapter.

The Financial Calculus: Lump Sum vs. Steady Income

The most immediate difference between selling and renting comes down to cash flow.

If you choose to sell, you secure a big lump sum of cash up front. This instant equity can be the down payment on your next property, a tool to wipe out high-interest debt, or a cushion for your savings. Selling now locks in the profit you’ve built over the years, taking it from being "on paper" to being "in your bank account." You gain finality and a clean break from the property.

If you choose to rent, you swap the lump sum for steady monthly income. This slower burn can be powerful for long-term wealth building, allowing you to continue building equity. You maintain the long-term value upside: if prices continue to rise, you could sell later at an even better number.

But here is the absolute reality check: for renting to be a winning plan, the rent must cover your mortgage, taxes, insurance, maintenance, and vacancy costs with a cushion left over. If your math only covers your mortgage and you are subsidizing the tenant, you are losing.

The Hidden Cost: Losing Your Florida Homestead Exemption

This is the single biggest catch most accidental landlords miss, and it can quickly wipe out your rental profit.

Once your primary residence becomes a rental, you lose your Florida Homestead Exemption. This exemption is critical because it keeps your property taxes lower and, more importantly, caps your assessed value increase at three percent a year (the Save Our Homes Amendment). Once the home is rented, that annual cap jumps to ten percent annually.

Consider a real-world example: A Central Florida home bought years ago for $150,000 might have a current assessed value of $220,000 due to the 3% cap, even if the market value is $450,000. Your tax bill is based on that low $220,000 value. If you rent it out in 2026, the 3% cap vanishes. Your assessed value could climb by up to 10% each year until it hits market value. That change can easily cause your property tax bill to roughly double or triple over the next several years.

In the example above, if taxes rise from $1,800 to over $5,000 a year, that’s an extra $3,200 annually (or about $265 per month) in added costs. Add rising insurance and general upkeep, and your rental must command several hundred dollars more per month just to break even. This is why running a real-world budget is non-negotiable.

Capital Gains Exclusion: Timing is Everything

The other major tax consideration is the federal capital gains exclusion. If you have lived in your home for at least two of the last five years, you can typically sell and avoid paying taxes on the profit up to $250,000 (single) or $500,000 (married).

Wait too long after moving out and renting the property, and you can lose that exclusion entirely. For a property with significant appreciation, this could mean the difference between a tax-free sale and a substantial capital gains tax bill. Timing matters immensely.

Disclaimer: I am a real estate professional, not a CPA. Always consult your own tax advisor before making a move. Do not rely on advice from social media or Uncle Larry.

Lifestyle and Local Context

Beyond the balance sheet, consider the lifestyle. Are you ready to be a landlord? It is not passive income; it is another job. You are on the hook for repairs, vacancies, and late-night calls about a broken AC. If that sounds like too much, selling gives you total freedom. If you like the idea of the income but not the headache, hire a property manager, but remember their fee (typically 10% of the rent) must be factored into your math.

Finally, remember that Florida is a patchwork of local markets. Seminole County does not move the same way as Volusia. You need localized data to make an informed decision. While Central Florida still has strong demand, inventory has been creeping up in some pockets. Reading the local signs is key to capturing the best value before any potential slowdown.

Your Next Step: Run the Numbers

The right choice—selling or renting—is the one that fits your life, your timeline, and your stress level.

Both paths can work, but only if you plan right. Selling means instant cash, no property worries, and total freedom. Renting means steady income, continued ownership, and potential long-term growth.

Before you decide, grab your free copy of the Sunshine State Handbook. It includes a detailed worksheet to help you compare your sale proceeds to your net rental cash flow, factoring in all the hidden costs.