Rental Properties

How to Make $10,000 a Month From Rental Properties

Last Updated on February 17, 2022 by Mark Ferguson

When I first started my rental property journey, I thought it would be amazing when I hit $10,000 a month from rental properties alone. I passed that up a while ago and have kept going. Let me tell you, it was pretty amazing to hit that milestone and know that no matter what else happens in my businesses I have that money coming in. I have big goals and while $10,000 a month is awesome it is not nearly close to what my end goals are. For some people that would be more than enough and for others not even close, and that is okay. We all have different hopes and dreams. One thing is certain, real estate and rental properties in particular can be one of the best ways to build passive income and reach goals lie $10,000 a month without having to do much work.

Why $10,000?

$10,000 a month is a nice figure because it would replace most people’s income. There may be some people like myself who are looking to make a lot more, but a lot would be happy with $10,000. Even if you want to make a lot more $10,000 a month is a nice cushion if you are trying to be ultra-aggressive with other business ventures.

If you feel this number has no resonation with you because it is too big or too small the concepts stay the same. You can adjust it up or down using the numbers we use here. The way I wrote this article it will be very to plug and play the numbers in many different scenarios to see what works best for you!

Why rental properties?

I have been in real estate for a long time but I did not invest in rentals right away. It took me a while to realize all of the benefits and how great they can be building wealth. I chose to invest in rentals because of the cash flow they can produce. They have many other great features but the cash flow aspect was number one for me.

When you buy a great rental property it should make you money every month even after paying the expenses including the mortgage. That means the rent should cover the:

  • property taxes
  • insurance
  • maintenance
  • vacancies
  • property management
  • HOA
  • mortgage

After paying all of those expenses you should have a few hundred to a few thousand dollars leftover depending on the property. The cool thing about cash flow is that you can calculate fairly accurately how much money you will be making now and in the future. It is much easier to see what the cash flow is and how much income will be coming in based on the properties you have than it is to guess what the stock market will gain and how much money you will need to retire based on how long you live.

The cash flow will come in as long as you live and increase with time thanks to rents increasing with inflation and loans eventually being paid off. If I can build $10,000 a month in cash flow now, I am 99% sure I will have that much money coming in later on in my life unless I sell properties.

Some of the other advantages of rental properties are:

  • Tax advantages
  • Loan pay down
  • Buying below market
  • Appreciation

Those make rental properties a home run in my opinion but the cash flow is still my number one goal.

How much cash flow can you make on each property?

It would be really easy to know how to make $10,000 a month if we always knew exactly how much money each rental property made. However, every property is different and investors use different strategies to buy those properties. Some investors buy $30,000 rentals, some buy $300,000 rentals and some buy $3,000,000 dollar rentals. I could keep going but if you are buying a $30,000,000 dollar rental you better be making much more than $10,000 a month!

In my experience with the right rental property priced from $100,000 to $150,000, you can make $400 to $500 a month in cash flow. Some people will make that much on cheaper properties and some that much on more expensive properties. One of the good and bad things with real estate is that every property is different. Every state is different in regard to property taxes, insurance, taxes, title, etc. The costs and profits will be different everywhere you go. In some areas, it is very hard to cash flow on a rental, and in others, it is pretty easy.

The key to figuring out how much money you make with rentals is figuring out how much you will make on each property and how many of those properties you need to buy. Of course, if you are like me and buy different types of properties in different price ranges that gets even more difficult.

How much money do you need to buy a rental?

One of the other very important things to consider when thinking about getting to $10,000 a month in income from rentals is how much money is it going to cost you to create that much income. $10,000 a month is $120,000 a year, which means a $1,200,000 investment would give you a 10% return on your money if you are just counting cash flow.

If you invested $2,400,000 and made $10,000 a month you would make 5% on your money from cash flow alone and if you invested $600,000 and made $10,000 a month that would be a 20% return on your money. How much will it really cost you to buy rentals and get to $10,000 a month?

When I was buying rentals from $80,000 to $120,000 and renting them from $1,200 to $1,400 a month I was making about $500 a month in cash flow after putting 20% percent down. I was also fixing up the properties because I was getting really good deals so I would put from $7,500 to $20,000 of cash into the repairs as well.

Using this example I would need to buy 20 rentals to get to $10,000 a month ($500 x 20 = $10,000). If each rental cost me $100,000 that means I was putting about $30,000 to $35,000 in cash into each one to produce $500 a month. For my situation, I would need $600,000 to $700,000 in order to create $10,000 a month in income from rentals assuming I bought them all straight up.

However, there are ways to buy rentals with less money or with more if you choose. You could always pay cash or work harder to put less money down or get money back that you spent on the property after getting it rented.

How will the numbers look based on different scenarios?

I just spoke on my scenario but as I said earlier every property is different and every market is different as well. While I might need $600,000 in cash to get to $10,000 a month in rental-property income, someone else may need $1,000,000 or more, while others may need even less.

If I were making $300 per property that means I would need to own 33 rentals and I would need about $1,000,000 in cash to buy and fix those up. Here are some other scenarios with different results.

  • Make $500 a month but not need any repairs to properties: $400,000
  • Make $500 a month but buying $50,000 properties with cash: $1,000,000
  • Make $1,000 a month but paying $300,000 for a property with repairs: $800,000
  • Make $5,000 a month on an apartment complex that needs repairs: $400,000

These are four scenarios of what could be endless possibilities based on the deals you can get and the cash flow on the properties. Some people may live in areas where it is very tough to cash flow and they could buy 100 properties and still not reach $10,000 a month.

plan to buy 100 houses

Can you make $10k a month from rental properties with less cash?

I know a lot of you are thinking I don’t have $500,000 to invest in rental properties! This is crazy! I don’t blame you for thinking that because most people do not have that much money and I had nowhere close to that much money when I started. Even though I have gotten past the $10,000 a month figure I still have not invested that much into my rental properties.

I mentioned buying below market value as one of the advantages of owning rentals earlier in the article. Buying below market is what I have always done and is what allowed me to put less of my own cash into the rentals. I did not spend $600,000 buying 20 rentals because I used refinances and sold a few properties along the way which gave me a lot of cash back.

For example, I bought my second rental property for $92,000. I fixed it up, rented it, and had it for a year or two when I realized I had a lot of equity in the property. I bought it for $92,000, spent about $15,000 on the repairs, and it was worth $130,000 to $140,000 after making those repairs.

After a year or two, it was worth $160,000. I put 20% down so my loan was only $73,600 when I first bought it and after a year or two, it was down to $71,000 or so. My $34,000 initial investment had turned into almost $90,000 in equity on top of the cash flow I was making every month. I did not have to let that cash flow sit in the properties, I could use it by refinancing the property.

If I were to refinance the property, which means get a new loan that replaces the old loan, I could get cashback (cash-out refinance). The typical loan to value for a refinance on a rental property is 75% which means I could get back:

  • $160,000 value
  • $128,000 loan (75% of value)
  • $71,000 old loan
  • $4,500 in closing costs for new loan
  • $52,500 cash back after paying  the closing costs

I could get all of the cash I spent on the house back and then some. This is commonly known as the BRRRR strategy. If I did this just a few times I would need much less money. My cash flow would go down some on the properties I refinance because the loan payments would be higher, but the extra cash would allow me to buy more properties with less money. Instead of needing $600,000 to buy 20 properties I many only need $300,000 to buy 25 properties and still have the $10,000 a month in income.

Selling some of my rentals to raise cash

Another way I was able to buy more rentals with less cash was by selling some of my rental properties. That may not make sense on the surface: sell properties so you can buy more? However, that is exactly how it worked. For example, I sold rental property number 6 in 2016.

  • Bought for $88,000 in 2013
  • Spent $14,000 repairing it
  • Rented for $1,250/month for 3 years
  • Spent another $10,000 refreshing it
  • Sold for 199,900 in 2016

The property made me money every month and it gained a ton of value and I bought it below value. By selling the house I was able to get back more than $110,000, which was way more than I put into it. I had to pay some taxes on that money, but I could buy two or three rentals with the cash I had made from selling that one rental. I sold that rental because it had a weird floorplan and was tough to rent.


There are many ways to buy rentals. I have bought commercial rentals with private money that needed no money from me. I stabilized the properties and then refinanced them with a traditional bank that sometimes gave me money back! While on the surface it looks tough to get to $10,000 a month with rental property income, you don’t have to save up hundreds of thousands of dollars. I have spent a lot of money buying my rentals but much less than if I had not used refinances, private money, and selling a few properties to recoup the cash. $10,000 a month is a great goal but it may not be the right goal for you. If you think you need more or less simply plug in some different numbers using the ideas posted above.

If you are new to real estate investing and our looking to get started yourself, check out my Real Estate Investor Jump-Start course!

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