Should you sell your Tampa Bay house or rent it out?

How much could your house rent for in Tampa Bay?

As a rough benchmark, HUD's 2027 Fair Market Rents for the metro are $1,917 for 2 bedrooms, $2,448 for 3 and $2,977 for 4. Your house could rent for more or less, depending on its size, condition and location.

What these numbers are. HUD sets Fair Market Rents at the 40th percentile of rents paid by recent movers in the area, and they count the rent plus the cost of utilities, except telephone (24 CFR 888.113). HUD uses them to run programs such as the Housing Choice Voucher program (HUD USER). They are not an appraisal or a rent quote. Because they include utilities, the rent alone for a house where the tenant pays the utilities would be lower than the table shows.

HUD also sets ZIP-code-level Small Area Fair Market Rents for this metro, which the voucher program here must use (FY 2027 schedule). To price your own house, compare similar rentals listed nearby or ask a licensed property manager.

Does renting pay after costs? A monthly example

Only if the rent is well above every monthly cost. In the example below, a house with a mortgage barely breaks even when you manage it yourself, and loses money with a property manager.

The example leaves out big repairs like a roof or air conditioner, HOA fees, legal costs if a tenant does not pay, income tax on the rent, and what you could earn on the cash from a sale. If the house is paid off, the same example leaves $1,235 a month before income tax when you manage it yourself. Use your own mortgage statement, a landlord policy quote and a tax estimate without the homestead exemption.

What happens to your property taxes if you rent out your homestead?

They usually go up. Renting all or most of a homestead counts as giving it up, so the exemption and the Save Our Homes cap end, the house is assessed at market value, and after that increases are capped at 10 percent a year, except for school taxes.

• The exemption ends. Florida law says renting all or substantially all of a homestead counts as abandoning it until the owner moves back in. If the renting starts after January 1, that year's exemption is generally not affected, unless the house is rented more than 30 days a year for 2 years in a row (Fla. Stat. 196.061).
• Save Our Homes stops. While the house is your homestead, its assessed value can rise only 3 percent a year or the change in the Consumer Price Index, whichever is lower (Fla. Stat. 193.155). Over many years that cap can leave the assessed value well below market value.
• A reset, then a 10 percent cap. A house with 9 or fewer units and no homestead exemption is assessed at market value when it becomes eligible for the non-homestead cap. After that, its assessed value can rise no more than 10 percent a year for every tax except school district taxes (Fla. Stat. 193.1554). The Pinellas Property Appraiser explains that when a home stops being a homestead, its market and assessed values are made equal the first January 1 after the change, and the 10 percent cap starts the next January 1 (Pinellas Property Appraiser).
• Moving the savings. If you had a homestead exemption on January 1 of any of the 3 years before you set up a new Florida homestead, you may be able to carry up to $500,000 of the Save Our Homes difference to the new home, often called portability (Fla. Stat. 193.155). Ask the property appraiser how it applies to you.

What does a Florida landlord have to do, and what changes on insurance?

Follow Florida's landlord-tenant law in chapter 83: hold the security deposit the way the law says, keep the house up to code, and give the required disclosures. Your homeowners policy usually has to change to a landlord policy, often called a dwelling fire policy.

• Security deposit. Hold it in a separate Florida bank account or post a surety bond, and tell the tenant in writing, in the lease or within 30 days, how it is held. After the lease ends, return it within 15 days, or within 30 days send a written notice of any claim by certified mail or agreed e-mail (Fla. Stat. 83.49).
• Upkeep. Follow the building, housing and health codes. For a single-family home or duplex, some of these duties can be changed in a written agreement, and working smoke detectors must be installed when the tenancy starts unless agreed otherwise in writing (Fla. Stat. 83.51).
• Your name and address. Give the tenant, in writing, the name and address of the landlord or the person who receives notices (Fla. Stat. 83.50).
• Flood disclosure. Before signing a lease of 1 year or longer, give a separate flood disclosure saying whether you know of flood damage during your ownership, filed a flood claim, or got flood aid such as FEMA assistance (Fla. Stat. 83.512).
• Lead paint, for homes built before 1978. Federal rules require you to disclose known lead-based paint, share any records, give the "Protect Your Family From Lead in Your Home" pamphlet and include a lead warning in the lease (EPA).
• A property manager. In Florida, someone who rents out other people's property for pay generally must hold a real estate license (Fla. Stat. 475.01). Ask to see it.

Insurance. Citizens Property Insurance, for example, says its HO-3 homeowners policy requires the owner to live in the home as a primary residence, while its DP-3 dwelling fire policy is available for tenant-occupied homes and can cover lost rent (Citizens). Florida's Department of Financial Services says a dwelling form may be used instead of a homeowners form for a home rented to others (Florida DFS). Call your agent before a tenant moves in and ask what a landlord policy would cost and cover.

If tenants are already in a house you now want to sell, our guide to selling a rental with tenants covers notice, showings and deposits.

How do income taxes compare if you sell now or rent first?

Selling while you still qualify can make up to $250,000 of gain tax-free ($500,000 for most married couples filing jointly). Rent is taxable income, and depreciation taken (or that could have been taken) while you rent is taxed when you sell.

• The 2-of-5-year test. To use the home sale exclusion, you generally must have owned the home and lived in it for at least 24 months of the 5 years before the sale date. The 24 months do not have to be in a row (IRS Publication 523).
• How renting can cost it. The 5 years count back from the sale date. So if you lived there at least 2 years and then rent it out, you generally need to sell within about 3 years after moving out to still pass the test. Publication 523 gives an example of an owner who moved out, rented the home for a little over 2 years, and still qualified.
• Depreciation is taxed when you sell. Even when the exclusion applies, you cannot exclude gain equal to depreciation allowed or allowable after May 6, 1997 (Publication 523). That part can be taxed at up to 25 percent (IRS Topic 409).
• While you rent. Rent is income, usually reported on Schedule E. The house (not the land) is depreciated over 27.5 years, and when you turn a home into a rental, the starting basis for depreciation is the lower of its market value or your adjusted basis on that date (IRS Publication 527).

What differs in Pinellas, Hillsborough and Pasco, including vacation rental taxes?

The state rules and HUD's rent area are the same in all three counties. What differs is the property appraiser you report to and the county tourist development tax on rentals of 6 months or less.

Vacation rentals. Renting the whole house more than three times a year for stays under 30 days, or advertising it as regularly rented to guests, needs a vacation rental license from the Florida DBPR Division of Hotels and Restaurants, and city or county rules can apply too (DBPR). You also register with the Florida Department of Revenue to collect sales tax on short-term rentals (Florida DOR). The county tourist development tax is added to the 6 percent state sales tax and any county sales surtax (Florida DOR, DR-15TDT). Check your HOA or condo rules as well.

Sell, rent long-term, hire a manager, rent short-term or sell for cash: which fits?

There is no single right answer. Here is an honest comparison of the realistic choices, including keeping the house.

To compare what a cash sale and a listing would leave you, use our cash offer vs. listing calculator, and see how we calculate an offer.

How does Tao Home Buyers fit into a sell-or-rent decision?

We are one option, not the right one for everyone. If renting pays for you, or the house would sell well on the open market, that may leave you more. If you would rather sell as-is on a set date, we buy houses for cash in Pinellas, Hillsborough and Pasco.

Tao Builders LLC is the end buyer: it buys in its own name, closes at a licensed title company, and does not assign or wholesale contracts. Earnest money goes to the title company the same day you sign, or the next business morning if you sign after hours. We can close in as few as 10 days when the title is clear, and you pick the closing date.

Our cash offer will usually be below what the house would sell for fully repaired, and Matan, the owner, walks you through the numbers behind it. He has bought houses around Tampa Bay for 4 years and has personally bought more than 50. He is a licensed Florida real estate sales associate with Jay Alan Real Estate, buying for his own company as a principal, not as anyone's agent.

Sources

Official sources we checked for this page. Rules change, so confirm anything important with the source or a Florida attorney.

1. Fair Market Rents, FY 2027 (HUD USER)
2. FY 2027 Schedule of Fair Market Rents, Tampa-St. Petersburg-Clearwater, FL MSA (HUD USER)
3. 24 CFR 888.113, how Fair Market Rents are set (eCFR)
4. Fla. Stat. 196.061, rental of homestead constitutes abandonment (Florida Senate)
5. Fla. Stat. 193.1554, assessment of non-homestead residential property (Florida Senate)
6. Fla. Stat. 193.155, homestead assessments and portability (Florida Senate)
7. Fla. Stat. 83.49, security deposits and advance rent (Florida Senate)
8. Fla. Stat. 83.51, landlord's obligation to maintain premises (Florida Senate)
9. Publication 523, Selling Your Home (IRS)
10. Publication 527, Residential Rental Property (IRS)
11. Vacation rental licensing guide (Florida DBPR, Division of Hotels and Restaurants)
12. DR-15TDT, local option transient rental tax rates (Florida Department of Revenue)