Calculating Returns on Flipping a House vs Renting vs Investing in Stock

My parents and I have purchased a house that we (mostly through the work of my mom honestly) are renovating.  The project is practically finished and we are at the decision point of asking ourselves: do we sell the house or do we rent it out?

There are a ton of factors to consider:

1) How much could we sell the house for?

2) How much rent could we get for it?

3) If we sell now we will pay tax on the profit at our marginal tax bracket rate (28% most likely)?

4) If we rent it out, how much value will be lost by selling the house later when it’s not in pristine condition that it is now?

5) How much will this area appreciate in value over the next X years?

6) How much will property taxes increase?

7) How much money will we need to invest to maintain the property?

8) What type of return on investment would we be realizing if we didn’t buy the house and just stuck our money in the stock market?

9) If we flipped the house and the invested the proceeds for the next X years, how would that compare with renting the house over those years?

These are just the tip of the iceberg.  Obviously there is no way that we can identify all these values and know all these answers, but in order to try to improve my understanding of the issue, I’ve created a fairly detailed excel file to analyze as many data points as I could think of when it comes to answering: Should I buy this house and fix it up or invest my money elsewhere, and if investing in the property makes sense, should we rent it or flip it?

I’m not an expert at any of this, so take my excel file and its calculations with a grain of salt.  If anyone notices something I’ve done wrong I’d be interested to know so I can update the excel document with more accurate information.

Rent vs Flip Calculations Template Excel Document

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