Renting out your house in 2026 usually makes sense if three things are true: the rent covers your mortgage, HOA, insurance and a repair reserve; you have a low-rate mortgage you would hate to give up; and you can still sell within the IRS’s home-sale exclusion window if you change your mind. Selling usually makes more sense if the home would run at a monthly loss, you need the equity now, or you don’t want to be a landlord at all. Here is how to run the numbers with current Phoenix data.

Updated October 2026.

Why so many Phoenix owners are asking this now

Two forces are creating “accidental landlords,” owners who move but keep the old house:

• Rates. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed rate at 7.40% on October 15, 2026. An owner with a loan from a lower-rate year gives that rate up by selling.
• A softer sale market. Zillow’s September 2026 market report, as summarized by AZ Big Media, put the typical Phoenix home value at $440,821, down 1.1% from a year earlier, with for-sale inventory up 4.4%.

Renting buys time. It also makes you a business owner, so go in with numbers, not hopes.

What rent can your home realistically bring?

Rents in the metro have been flat to down:

• Zillow’s Observed Rent Index for the Phoenix metro was $1,720 in September 2026 (all rental types), up 1% from a year earlier.
• Rental Beast’s Q2 2026 Phoenix report, based on ARMLS data, put the median single-family rent at $1,999, down 4.8% from a year earlier, with 65.8% of listings offering concessions.

Your home’s rent depends on its own comparables, so don’t plug a metro number into your math. Get a rental analysis based on nearby leased homes.

Worked example: monthly cash flow at $2,400 rent

This example uses illustrative owner costs. Replace them with your own figures. Assume:

• Rent: $2,400
• Mortgage payment, including taxes and insurance: $1,650 (example)
• HOA dues: $90 (example)
• Repair and vacancy reserve: 10% of rent, or $240 (your choice of cushion)

With Property Plus USA’s three plans:

• Basic ($75 flat): $2,400 − $75 − $1,650 − $90 − $240 = $345 a month
• Traditional (8% = $192): $2,400 − $192 − $1,650 − $90 − $240 = $228 a month
• Property Plus (10% = $240): $2,400 − $240 − $1,650 − $90 − $240 = $180 a month

Each plan also has a $500 leasing fee when the tenant is placed, and Basic has a $199 file setup and $200 realtor commission in year one. Property Plus costs the most monthly but includes landlord protection up to $50,000 when we place the tenant, which can matter more to a first-time landlord than the extra cash flow.

If your own version of this math comes out negative, renting means paying each month to hold the house. That can still make sense if you expect appreciation or want to keep a low rate, but decide on purpose.

The tax clock you should know about

Under IRS Topic 701, you can exclude up to $250,000 of gain ($500,000 on a joint return) when you sell a main home you owned and lived in for at least 2 of the 5 years before the sale. The two years don’t have to be continuous.

What this means for a new landlord:

• If you lived in the home for two years before moving out, you generally have up to three years after moving out to sell and still meet the use test.
• IRS Publication 523 says you cannot exclude gain equal to depreciation claimed after May 6, 1997. Depreciation taken while the home is a rental is taxed when you sell, even within the window.
• Rental income and expenses, including management fees, go on Schedule E (IRS Publication 527).

Talk with a tax professional before you decide. The exclusion window is often the deciding factor.

Questions to answer before you decide

Financial

• Does the rent cover the full payment plus a reserve?
• Can you carry a month or two of vacancy, or a major AC replacement, without stress?
• Do you need the equity for your next home’s down payment?

Practical

• Will you be close enough to handle repairs, or will you need a manager?
• Does your HOA allow rentals, and what are its lease rules?
• Is your insurance switched to a landlord policy?

Personal

• Are you willing to see the home as an investment rather than “your” house?
• How will you feel about normal wear from someone else living there?

If you decide to rent: an accidental landlord checklist

• Register the rental with your county assessor (A.R.S. 33-1902). Name an Arizona statutory agent if you are moving out of state.
• Change your insurance to a landlord policy.
• Collect a security deposit of no more than one and a half months’ rent (A.R.S. 33-1321).
• Note that long-term residential rent has been free of Arizona TPT since January 1, 2025 (Arizona Department of Revenue).
• Make the home rent-ready, starting with AC service and fresh paint.
• Decide between self-managing and hiring a manager before you list.

If you decide to sell

Selling gives you a clean exit, your equity and no landlord duties. In a market with rising inventory, pricing and presentation matter. If you might sell within a year or two anyway, compare the after-tax result of selling now with renting and selling inside the exclusion window. Ask your listing agent for a net sheet that shows commissions, closing costs and any buyer concessions, so you compare the rental math with what you would actually walk away with.

Get both numbers before you choose

We can give you a free rental analysis so the rent side of your decision rests on real comparables. Call 480-586-3700 or reach us through the contact page, and see what management would cost on our pricing page. Thinking longer term? Our guide to real estate investing in Chandler covers holding rentals as investments. We manage homes throughout the West Valley, including Goodyear, and across the East Valley.

Frequently asked questions