Should you sell or rent out your house in Clermont, FL?
In 2026, the decision comes down to Florida-specific math most rent-vs-sell calculators ignore. Renting out your Clermont home means losing the Save Our Homes 3% assessment cap and the homestead exemption, which resets your property tax to full market value the following January. Add landlord insurance now averaging over $5,000 a year in Florida, and a home that once cash-flowed can turn break-even or negative. Selling usually wins if you’re near the two-year capital gains exclusion window or need the equity; renting can win if you have a low locked mortgage rate and the numbers still pencil out after the new tax and insurance.
By Amber Welch | July 17, 2026
You locked a mortgage in the low 3s. Now you’re staring at 6.5% and thinking the same thing half of Clermont is thinking: why sell and give up this rate when I could rent the house out and let someone else pay the mortgage?
It’s a fair instinct. But in Florida in 2026, "just rent it out" hides a few expensive surprises that don’t show up until the first tax bill or insurance renewal lands. Before you decide, you want to run the real numbers, not the back-of-the-napkin ones. Here’s how I walk clients through it.
The Florida costs that quietly kill rental cash flow
Two line items decide most sell-or-rent questions in Central Florida right now, and neither one is the mortgage.
Landlord insurance. A standard homeowners policy doesn’t cover a rental. You need a landlord (DP-3) policy, and in Florida those have climbed hard. Statewide, landlord coverage now averages north of $5,000 a year, roughly double the national average, and that’s before any older-roof surcharge. On a Clermont single-family home, plan for a four-figure insurance line that’s meaningfully higher than what you pay as an owner-occupant.
Your property tax resets. This is the one that catches people. As long as the home is your homestead, the Save Our Homes cap holds your assessed value increases to 3% a year, and you keep the $50,000 homestead exemption. The day it stops being your primary residence and becomes a rental, you lose both. The property gets reassessed to full market value the following January 1, and that Save Our Homes benefit is gone for good. If you want the deeper mechanics, I broke down how the assessment reset works in my guide to Florida property tax sticker shock in Clermont.
If you’ve owned your Clermont home for years, that reset can add hundreds of dollars a month to the tax bill overnight. A home that looked like it cash-flowed at your current tax figure can flip negative once it’s assessed at today’s roughly $450,000 market value instead of your capped number.
Then stack the rest of the landlord math:
- Property management, if you don’t self-manage: usually around 10% of the rent
- A maintenance reserve: budget about 1% of the home’s value per year
- Vacancy: even a few weeks between tenants eats a month’s margin
- Repairs the tenant reports at the worst possible time
Clermont single-family homes rent in roughly the $2,000 to $2,500 range depending on size and location. Put a realistic rent against the new tax, the higher insurance, management, and reserves, and you’ll see quickly whether you have a business or a slow leak.
The tax clock you don’t want to run out
If you’ve lived in your home at least two of the last five years, you can exclude up to $250,000 of your sale profit from federal capital gains tax, or up to $500,000 if you’re married filing jointly. Florida has no state capital gains tax on top of that, so for most Clermont sellers the gain on a primary residence is federally sheltered and state-free. I walk through the full test in my post on capital gains tax on a Florida home sale.
Rent the house out too long and you can lose that shelter. The exclusion depends on that two-of-five-year test, so once the home has been a rental long enough that you no longer meet it, the gain becomes taxable. There’s a nuance in the tax code that lets you ignore some non-qualified use after you move out, but the two-of-five clock is unforgiving, and any depreciation you claim as a landlord gets recaptured and taxed (up to 25%) when you eventually sell. I’m not a CPA, and this is exactly the kind of thing to confirm with a tax professional before you decide, but the timing matters enough that it belongs in the conversation now, not after you’ve rented for three years.
The flip side, and the reason renting still tempts people: Florida charges no state income tax on your rental income, and as a landlord you can deduct mortgage interest, property taxes, insurance, repairs, management fees, and depreciation on Schedule E. If the home genuinely cash-flows after the reset tax and the higher insurance, those are real long-term advantages, and you get to keep a low-rate asset in a growing market.
One more Florida wrinkle: an annual lease of 12 months is exempt from state sales tax, but if you’re tempted to short-term rent instead, rentals of six months or less trigger Florida sales tax plus the local tourist development tax. That changes both the math and the licensing, so decide which business you’re actually in.
When renting makes sense, and when selling wins
There’s no universal answer, but the decision usually sorts cleanly once you have the numbers.
Renting tends to win when:
- You have a low fixed-rate mortgage and the home still cash-flows after the reassessed tax and a real landlord-insurance quote
- You have a long time horizon and want the appreciation in a growing corridor like South Lake, near the Wellness Way expansion and the new development around Clermont
- You have cash reserves for vacancies and repairs, and you’re genuinely comfortable being a landlord
Selling tends to win when:
- You’re at or near the end of your capital gains exclusion window and want to keep that profit tax-free
- You need the equity for your next down payment, especially if you’re buying before rates move
- The reassessed tax plus 2026 insurance turns the rental cash-flow negative
- You don’t want landlord risk in one of the highest-insurance-cost states in the country
And here’s the good news if you land on selling: Clermont is a balanced market right now, not a distressed one. The median sale price sits around $450,000, homes are going for about 98% of list, and well-priced homes are still moving in a couple of months, so you’re not fire-selling. I explain what actually drives that timeline in how long it takes to sell a house in Clermont. And if you’re weighing a traditional listing against an instant cash offer to move faster, run both nets side by side first, which I break down in iBuyer vs. listing in Clermont.
The honest truth is that "sell or rent" is a math question wearing an emotional coat. The instinct to protect a 3% rate is real, but the answer lives in the numbers: today’s sale value, a realistic rent, the new tax bill, and a current insurance quote. Get those four numbers on one page and the decision usually makes itself.
That’s the analysis I run for clients before they commit either way. I’ll pull a current market analysis so you know what the home would actually sell for today, estimate the reassessed tax and a real landlord-insurance range, and put the sale net and the rent cash-flow side by side so you’re deciding on facts, not vibes.
Frequently Asked Questions
Do I lose my homestead exemption if I rent out my Florida house?
Yes. The homestead exemption and the Save Our Homes 3% assessment cap only apply to your primary residence. Once the home becomes a rental, you lose both, and the property is reassessed to full market value the following January 1, which usually raises the tax bill significantly.
Is renting out my house a good idea in Florida in 2026?
It can be, but only if the home cash-flows after the higher landlord insurance and the reset property tax. Florida landlord insurance now averages over $5,000 a year, and losing the Save Our Homes cap can add hundreds a month in taxes, so run the full numbers before assuming a low mortgage rate makes it profitable.
How long can I rent my house before losing the capital gains exclusion?
The federal exclusion (up to $250,000 single, $500,000 married) requires that you lived in the home at least two of the five years before the sale. Rent it out long enough that you no longer meet that test and the gain becomes taxable. Confirm the exact timing with a tax professional, because depreciation recapture can also apply.
How much does it cost to be a landlord in Clermont?
Beyond the mortgage, budget for landlord insurance (a four-figure annual line in Florida), the reassessed property tax after you lose homestead status, about 10% for management if you don’t self-manage, a maintenance reserve near 1% of the home’s value per year, and vacancy. Clermont single-family rents run roughly $2,000 to $2,500, so those costs decide whether you profit.
Should I sell now or wait in Clermont’s 2026 market?
Clermont is balanced, with a median sale price around $450,000 and homes selling near 98% of list, so a well-priced home still sells without a steep discount. Whether to sell now depends on your equity, your capital gains window, and your next move, not on trying to time the market perfectly.
Deciding between selling and renting your Clermont home
If you’re weighing whether to sell or rent your Clermont home, the worst thing you can do is decide on the mortgage rate alone. Once you see today’s sale value, a realistic rent, the reset tax, and a real insurance number on one page, the right call is usually clear.
If you’re leaning toward selling, here’s what I offer that most agents don’t: a free walk-and-talk inspection with a certified InterNACHI inspector before you list, so you go in eyes-open, and my 65SOLD Guarantee, which means if I price and market your home with my full toolkit and you don’t receive an offer within 65 days, you can walk away from the listing agreement at no cost. And if the numbers say rent, I’ll tell you that too. Start the conversation at amberinorlando.myflodesk.com/homepage.
About Amber Welch
Amber Welch is a Realtor® and SFR (Short Sale and Foreclosure Resource) with Berkshire Hathaway HomeServices Results Realty, serving buyers, sellers, and investors in Clermont, FL and across Lake, Orange, Seminole, Osceola, and Polk counties. Before real estate, Amber guided multimillion-dollar companies as a CFO — and she brings that same precision and strategy to every transaction. She specializes in affordable housing, first-time buyers, and helping sellers maximize their equity in Central Florida’s rapidly growing market. Connect with Amber at amberinorlando.com.
