How Much Money can you Make from Rental Properties?

how much money rentals

14 Apr
How Much Money can you Make from Rental Properties?

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Rental properties have been a great investment for me and I have made a lot of money from them. I am making over $60,000 a year from the cash flow on my rental properties and I didn’t buy my first rental until December of 2010. I have 14 rental properties and I plan to buy 100 rentals by the year 2023. You can’t buy just any property and turn it into a rental if you want to make a lot money. You have to buy houses below market value and with great cash flow to be a successful rental property owner.

Learn How I

* Made $70,000 from rentals in 2014

* Flip 10 to 15 houses per year

* Plan to retire early with real estate

Plus, updates when new articles are posted.


You can find out more about me here on my About Page.

When I was able to start saving money in 2008 from my real estate business, I wanted to grow it as fast as possible. After exploring many investment opportunities, everything I read and researched pointed me to rental properties being the best investment. I have to say I am very happy I chose to invest in rental properties as not only are they bringing in over $60,000 a year, but they have appreciated in value and increased my net worth by $600,000.

I detail how I have been able to achieve these returns in my complete guide to investing in long-term rentals. In this article I will detail how much money you can make from rental properties over ten years.

Why I want to make a lot of money off rental properties

When I was younger I told myself I did not need the finer things in life, that I was happy with whatever I could afford. I told myself I didn’t need more expensive things, because I didn’t believe I could ever afford the things I really wanted.  In the last couple of years I have completely changed my thinking process. I now believe I can achieve and acquire whatever I want and I was doing myself a disservice by masking my true desires. I also realized that it feels really good to be able to help others and give to charity. The more money you have, the more you can give to charity and help others  If you have passive income coming in from rental properties then you will also have more time to dedicate towards helping others as well.

One of my passions is automobiles; I love classic and exotic cars. I purchased a 1986 Porsche 928 a few years ago and absolutely love that car. The 928 was the most expensive car Porsche made when it was built, but I was able to purchase the car for only $6,000. I think the 928 is one of the all time bargains for classic/exotic cars, unfortunately not all classic/exotic cars are bargains. My all time favorite car is  a Lamborghini Muira, which was built in the late 60’s and early 70’s. The Muira was the predecessor to the famous Lamborghini Countach, which is also one of my all time favorite cars. A Countach will run at least $300,000, in today’s market and a Muira is somewhere in the $800,000 range if not more. Not only are these cars extremely expensive to purchase, but maintaining them will cost thousands of dollars a year. It is not easy to maintain or find someone who knows how to maintain a Lamborghini.

Lamborghini Diablo and Real estate

Why are long-term rental properties are a great investment?

I knew if I ever wanted to be able to afford a Countach or a Muira, I would have to make a lot more money or get very high returns on the money I was investing. I have been able to do both in the last few years and a lot of that increase has been from my decision to start investing in long-term rental properties. I have purchased 11 rental properties and I am making over 20% cash on cash returns on all of them. In fact I am making over $5,000 from my rental properties every month. That is $60,000 a year in income from my rental properties, with very little management or time required.

It is not easy to find rental properties that provide that much cash flow; it takes me months to find great deals that make over $500 a month. My typical rental property costs between $80,000 and $130,000 and rents from $1,200 to $1,500 a month. I put 20 percent down on the properties and finance the rest with my portfolio lender. I usually end up spending $25,000 to $35,000 in cash to buy each rental property. Here is a great article that explains how I buy properties that meet these guidelines. Cash flow is not the only benefit of rental properties. I slowly pay down the mortgage every month on my rentals, I have great tax advantages and they will most likely appreciate. If you can’t find properties that cash flow well in your area, you may want to look into buying turn-key rental properties in different areas of the country.

I am able to save that much cash for each rental property because I make a very good living as a real estate agent and fix and flipping homes. I like to have nice cars and a nice house, but I always make sure I am saving and investing money first. There are ways to buy rental properties with little money down, but I think you will get farther ahead in life by saving as much as possible and investing wisely.

For more information on why rental properties are such a great investment and how to start investing in rental properties. Check out my E book Retire Rich and Early with Real Estate at Amazon as an 113 page E book or as a PDF for only $9.99!

Long-term goals are very important to my success in real estate

I know $60,000 a year is not enough extra income to justify purchasing a Lamborghini, but I just started investing in December of 2010. I plan to keep purchasing rental properties for at least the next ten years and my super aggressive goal is to own 100 rental properties by 2023. I have no idea how I will accomplish this goal given my current income and buying pace, but I also have no idea what exciting and lucrative opportunities may present themselves in the future. For the purpose of this article, I am going to assume I will buy three houses a year for ten years to show the income potential of long-term rentals. With this strategy I could easily afford the Countach and possibly the Muira with enough saving and planning. If you can’t afford to buy 3 rental properties a year, then check out this article where I detail how much you can make buying one rental property a year.

I have many long-term and short-term goals that I constantly tweak and review. Setting goals has been a huge part of my success and helped me focus on what is important and what I want out of life. This series of articles helps describe my mindset and what I have done to become successful.

Update: My goal changed from buying a Countach to a Lamborghini Diablo due to many reasons. I actually purchased a 1999 Lamborghini Diablo in June of 2014 and you can read all about it here

How much does it cost to buy a rental property?

I go over the exact cost of a rental property here, but lets assume it costs $30,000 to purchase and repair one rental. You don’t have to invest $90,000 a year to buy three rentals a year, because you can begin refinancing rental properties after you own them a year and taking cash out to invest in more rentals. You can also save the cash flow from your rental properties to buy more rental properties. I usually buy my properties for about $100,000, with a 4% interest rate and 20% down, which leaves a payment of $381 for principal and interest. Those numbers combined with rents from $1,200 to $1,500 a month leave me with at least $500 a month in income from my rental properties.

If you are looking for help developing a plan to build a rental property empire, check out the Complete Blueprint for Successful Real Estate Investing. I created this system to help people start making money with rentals right away in their market.

How can you make $500 a month in cash flow from a rental property?

It is not easy to make $500 a month in cash flow from a single rental property. I detail how to figure cash flow here and I also created a cash flow calculator to help people figure cash flow. Cash flow is not the rent minus the mortgage payment; there are many other factors that must be considered. My rents range from $1,250 to $1,500 a month and my mortgage payments range from $450 to $650 a month. I have to account for maintenance and vacancies on my rental properties, which leaves me with about $500 in profit each month. I buy my properties from $80,000 to $130,000 and usually make quite a few repairs before I rent them.

Making a lot of money with rental properties does not come from buying one property or even two, but from buying many properties. Here is a great article on the benefits of rental properties.

How much money can you make from rental properties in ten years?

Here is a chart showing the cash flow, houses paid off, extra cash flow from paying off mortgages, money paid towards mortgage reduction and total income for ten years.

Cash Flow = profit for each year

PO = How many properties are paid off

ECF = Extra cash flow from paid off properties

MRCF = Mortgage reduction amount from cash flow

INC = total income

Cash flow                  PO             ECF             MRCF               INC

1.        $18,000         0               0                $18,000            $18,000

2         $36,000        0                0                $54,000           $36,000

3.        $54,000        1            $4,572         $112,572           $58,572

4.        $72,000        2           $9,144          $189,144           $81,144

5.        $90,000       3            $13,716        $292,860         $103,716

6.       $108,000      5            $22,860      $423,720         $130,860

7.       $126,000      7             $32,004      $581,724          $158,004

8.       $144,000      9             $41,148       $766,872          $185,148

9.       $162,000      12           $54,840       $983,712          $216,840

10.     $180,000      15           $68,580      $1,232,292      $248,580

I hope the numbers make sense, I didn’t want to write  a novel to explain every detail. Basically after ten years, you would have invested $900,000 to buy 30 properties (assuming you didn’t refinance or use other methods to put less money down). You would be making $248,580 a year, which turns out to be 27% on the $900,000 invested.  You would also own 15 houses free and clear that would be worth 2.25 million dollars.

If you are looking for help learning how to invest in rental properties I offer The Complete Blueprint to Successful Real Estate Investing, which offers a 290 page guide, specific instructions on how to get started and learn your market, audio segments, personal coaching, conference calls, and much more all for a very reasonable price.

Additional benefits of rental properties

The really exciting thing is these numbers are not adjusted for any inflation, rent increases or appreciation to make the math simpler. My models for my rental properties show a higher income at the end of ten years, because I am making more than $500 a month cash flow per property and I am also planning on buying more than 30 houses in the next 10 years.  If things go as planned I will have more than enough passive income to afford that Muira! If you can’t find rental properties in your area that will cash flow, you may want to consider investing in turn-key rental properties.

If you are looking for a program to help you get started investing in rental properties that offers personal coaching, check out my Complete Blueprint to Successful Real Estate Investing.


If you can’t afford to buy this many houses or don’t want to buy this many, you can still have a great passive income by buying one house a year. It can cost a lot of money to buy a rental property, but you can more than make up for the initial cost by how much money you can make on rental properties. If you are wondering how I can afford to spend so much money on rental properties, I am a real estate agent that also fix and flips houses. Both business have been a great source of income and capital for the rental properties.

Related Articles

My plan to purchase 100 rental properties

How to finance more than four rental properties

How to buy property below market values

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  • jagesso
    Posted at 22:51h, 14 April Reply

    Good luck on the Muira! One of my favorites too. I like how you say you have no idea how you will accomplish this, but you also have no idea what opportunities will come. Great attitude…that’s how to keep pressing forward to realize ambitious goals!

    • investfourmore
      Posted at 01:46h, 15 April Reply

      If I only set goals that I knew exactly how to achieve, then it wouldn’t be nearly as challenging or exciting.

      • Randy
        Posted at 14:32h, 08 July Reply

        I am a 25 y/o subscriber of yours. Bought my first home at 21 y/o on a short sale 40k below value and used my first time homeowners 8k tax credit to renovate property. It’s been a great investment as I have rented it out for $500 extra cash flow per month (And I live in the master bedroom as I rented out the other three rooms through college). I have been raised a Dave Ramsey type of investor but I don’t agree 100% with everything he teaches. This RE investment idea is definitely good in theory, how far along are you as of today? And I would love to see your spreadsheet with all of the assumptions you made to come up with these numbers. Love this post, great work as we are all reading to hopefully learn something and expand our thinking!

        • Mark Ferguson
          Posted at 18:06h, 13 July Reply

          Hi Randy,
          Thank you for the comment! Good work on your rental. I have 10 rentals now with an 11th under contract. You can find the details under the rental property category on the blog. I think Dave Ramsey has some great ideas for those looking to save money, but he is ultra conservative about debt. Debt can be a great thing is used carefully and to create more money. My spreadsheets are actually hand written out year by year. I keep redoing them, which is an awesome exercise to get an idea of the numbers and progress I will be making.

  • Wrightius Maximus.
    Posted at 01:15h, 15 April Reply

    Are there any Aussie readers reading this? Is this possible to do in the current Aussie market or is this only possible for US readers given the cheap real estate on offer there at the mo?

    • investfourmore
      Posted at 01:55h, 15 April Reply

      I just saw this article about the Aussie market.
      I have no personal knowledge about what it’s like over there, but there are markets that don’t work for my model in the US as well. Many investors in New York, San Fransico or other high value areas end up investing in other areas of the country because prices are just too high in their local market to cash flow. You may try a simple google search for “best places to buy rental properties in Australia”.

    • Rachel
      Posted at 20:41h, 21 July Reply

      Hi. I’m an Aussie living in Atlanta. I think you’ll find it more difficult to achieve in Australia given the higher cost of houses and interest rates. I have a house in Brisbane which I’m currently selling so I can buy some rentals in Atlanta where I’ll get a better return. I wouldn’t be able to buy as cheap in Brisbane.

      • investfourmore
        Posted at 18:57h, 22 July Reply

        Hi Rachel, sorry for the delayed reply, I have been moving all weekend. I have heard from a couple Aussies, that prices are too high there to make the numbers work for investing. Good work taking the steps to invest in a better market. That can be a very scary thing to do, but sometimes it is the only choice.

    • paperdoll76
      Posted at 11:08h, 07 January Reply

      There’s still plenty of good pockets of affordable real estate in Australia. A lot of new investors get caught up with the ‘prestige’ of having an investment property and overlook golden investment suburbs in areas they wouldn’t live in themselves. An example would be Woodridge Qld.

      In Woodridge, it is strategically located between two major CBDs (Brisbane & Gold Coast), on a train line and the M1 Freeway, close to tafes and universities and has a consistent rental vacancy rate below 3% for over 10 years. You can still buy a 3 bedroom home there for less than 250k and rent that for $300 a week.

      There are a lot of positive cashflow opportunities there, It attracts a large ethnic diversity of cultures and you can get good long term tenancies and properties are never vacant for long.

      If you were wanting to dip your toe in property development, these areas are also great for finding a good large block that can be subdivided. If you look on Gumtree, often you can find houses for free that people want removed from their land so they can build. If you divide one of those properties, move a house onto the split block, give them both a spit and polish, and list one of them for sale, it will pay off the capital of the first property which you can then revalue and leverage to buy more. It costs about 25k to move a house, and about 20k for the subdivision with surveyors and whatnot.

      Think outside the square.

      • Mark Ferguson
        Posted at 02:06h, 09 January Reply

        Great info! Although where I am I would like to see that buy that house that rents for $1200 a month for around $100k

  • Wrightius Maximus.
    Posted at 02:22h, 15 April Reply

    Thank you.

    My current thinking is buy a $300,000 unit (the cheapest in a good area in Melbourne) Live in it and pay off in 6 years. Then go to a smaller city nearby and buy two more at $200,000 each. And “Snowball Method” these in 6 years. Just thinking out loud. Trying to do the best with what I have. Should leave me with a $40,000, adjusted for inflation, income and a place to live in ten years. Which I’d be very happy with. No Muira for me. I also think although it’s important to maximise your earnings and keep learning and pushing but I think it is also important to stick with what it is you can understand easily in order to not bite off more than you can chew. This is the balance I struggle to keep. I think keep it simple works best for me. Anyway. Great blog. Very inspiring. Keep it up.

    • investfourmore
      Posted at 03:04h, 15 April Reply

      Thank you very much. I am curious what the rents are like there on a 200k property?
      I agree about making sure you understand what you are doing before Doing it. Just like anything new it can seem a bit overwhelming and confusing the first time you learn about a topic. At your pace you’d be better off than 90% of people in retirement and it will take you a lot less time than most people.

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  • Maria
    Posted at 16:55h, 07 August Reply

    Your blogs are great! I’ve been reading them non-stop!

    Any direct lenders you recommend? I’m in California and looking to invest in central coast areas and north of California.


    • investfourmore
      Posted at 18:51h, 07 August Reply

      Thank you Maria,
      I don’t have any recommendations for California. My lender is on Colorado and only works in Colorado unfortunately.

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  • Colette
    Posted at 20:28h, 31 October Reply

    Hello Mark,

    Thank you for your article. I did not see any math for tax liabilities. How are you using all of your excess cash flow dollar for dollar, without any adjustments for taxes?

    Best Regards,


    • investfourmore
      Posted at 21:57h, 31 October Reply

      Most of the cash flow is income is countered by the tax savings by depreciating the properties. There is some other taxes that I pay on them, because the cash flow is higher that that depreciation, but I have not taken the time to calculate it out.

  • benallenphotography
    Posted at 19:12h, 13 November Reply

    Mark this is a brilliant explanation. I too, want to do some more in real estate. My family in particular has been burned on renting properties and so I’ve held back for until I learned more. How do you get and keep good renters? Do you, at any point, set up a company or companies to handle all the properties, paperwork and accounting involved?

    • investfourmore
      Posted at 03:24h, 15 November Reply

      Thank you for the comment and sorry for the delay responding. I am in Florida on vacation right now. I am in the process of starting a property management company right now. They will handle all the paperwork and accounting. It is really not too difficult with a few properties.

  • Darris
    Posted at 23:02h, 24 November Reply

    You want to earn more so you can give more to charity but it your earning more that ultimately leads to why they need charity in the first place. Speculation in the housing market increases land prices which increases rent. Rent being higher, the poor now ask for your generosity to help them meet their needs.

    I’m more ok with renting to students or people who are only renting because they’re in the market for a house, but having long-term tenants is the reason that rent is high. That’s why people who rent are also people who receive charity. The landlord is putting them there. He’s not doing it intentionally and he’s not doing it alone; there are other factors, but he is certainly one of them.

    I’m just saying.

    • Mark Ferguson
      Posted at 16:58h, 25 November Reply

      Hi Darris, I have heard this argument many times, but there are many fundamental flaws with it.

      1. Speculation in the housing market rarely raises house prices. It is a matter of supply and demand that raises house prices. The people that pay the highest amounts for houses are owner occupants. Investors look to get good deals and buy below market value, not pay at the top of the market.
      2. Land prices do not drive rent. Supply and demand drives rent. If house prices increase that does not mean rent prices will increase as well because landlords all get together and raise prices. Prices increase because there is a shortage of rentals and too many people looking to rent. There are many areas of the country with very high houses prices, but relatively low rent and vice verse.
      3. This is a free country and people can buy houses if they are able. The landlord is not forcing anyone to rent their houses. Not everyone wants to buy due to not wanting to settle in one place or bad credit or many other reasons. In my area it is cheaper to buy than to rent, but people still rent. It is not the landlord forcing people to rent houses but their own circumstances or choices.
      4. If there were not landlords where would people live who cannot buy homes? Landlords buy homes and rent them because there is demand for rentals. They cannot create the demand the renters do that.

  • Sean
    Posted at 01:01h, 28 December Reply


    I reside in Colorado as well. I just purchased my first home and I am now looking to move forward with purchasing my first rental property. My credit is decent (Decent enough for me to purchase a home) and i don’t have any liquid cash to put down 20% on a property. What investors would you recommend me contact, pertaining to investment property. And how could i use my asset(My home) to help spring board me into investing into more rental properties? Thank you in advance. I am in Denver Specifically.

    • Mark Ferguson
      Posted at 20:00h, 29 December Reply

      If you just purchased your current home you may not have much equity. It would be hard to use it for much unless you put a lot of money down. Finding investors for private money is one of the hardest things to to. I would check with friends and family first.

  • Don Kennard
    Posted at 14:11h, 22 March Reply

    Mark your articles are both educational, inspiring. and great reading material. They have motivated me to get the financial and physical freedom that I’ve been waiting on. I’ve been flipping and wholesaling for years but the market has changed and now I’m starting to implement your strategies as I’m about to purchase 2 properties this month to hold. Keep up the good work man….you’re the best!

    • Mark Ferguson
      Posted at 18:20h, 23 March Reply

      Thank you Don!

  • Elizabet Blazina
    Posted at 19:42h, 27 March Reply

    Hi Mark,
    Could you explain your numbers in more detail. For example where do you get your ” mortgage reduction amount ” in year two.. And what are your starting numbers? Cash flow of 18, 000 annually is what 500/month for 3 rentals? and the purchase price of the first one paid off is ?? I am using this model for mine but just not sure what your numbers reflect.

    Thanks and have really been enj0ying your blog.

    • Mark Ferguson
      Posted at 15:15h, 30 March Reply

      Hi, the mortgage amount reduction is from an amortization schedule you can get from
      Yes to $500 a month cash flow. I bought the first one for about $97,000.

  • Frank Marcoccia
    Posted at 14:51h, 10 April Reply

    Great article, but none of them touch on my situation .. which is POOR CREDIT .. and in the middle of a chapter 13 bankrupcty..
    that all being said.. in less than a year.. I should be getting about half a million dollars cash pay off what is left on the chapter 13.. ( about $30k) .. Lost home in bankrupcy etc..

    So my point with BAD CREDIT and about $500k in my pocket. with Zero Debt. NO credit cards etc. no car payments. everything paid off on the chap13.. (except house which was let go )..

    during all that. something happened and now were looking at a windfall .. my question .. I don’t need a loan to pay cash for a home.

    Should I purchase 1 or 2 homes? rent them out pay cash? or would I better off taking say $375k or so and purchasing a fourplex or whatever I can afford.? throw $25k – $50k into repairs if need be. and rent those out till the credit repairs itself? and then I will own the 4plex outright . have decent credit. in 2 – 3 years. and take a loan out on the building to purchase another property? say a home for $175k or so and rent that out?

    what’s the best thing to do with a bunch of cash. and bad credit!!

    • Mark Ferguson
      Posted at 19:15h, 10 April Reply

      Frank, that is a tough situation. Having that kind of cash is a great though. With bad credit I would talk to a lender asap to see what steps to take to make your credit improve the fastest. Having credit cards that are paid every month may improve your score.

      Deciding on what to buy depends a lot on your market, what price to rental ratios are and many other factors.

  • Marshall Lane
    Posted at 16:24h, 18 May Reply

    What if for 5 years you took all your profits and put back into buying more rentals to boost your plan and shorten your time line?

    • Mark Ferguson
      Posted at 22:11h, 18 May Reply

      I have been doing that recently!

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