You’d think rental properties are a license to print money. The truth is, some landlords just scrape by while others pocket enough to bankroll wild summer trips. So, how much should you actually aim to make each month per property? Forget the vague rule-of-thumb guesses. Let’s get into concrete numbers, smart standards, and why random averages rarely help you retire early. It’s a topic loaded with misplaced optimism, hard lessons, and that one uncle who always swears, “Real estate’s foolproof!”
People love big, round targets. $1,000, $2,000, $3,000… “That’s what I want to make every month,” I’ve heard endless times at kids’ soccer games while my son Nathaniel is off scoring goals. But is there a real magic number for monthly profit on a rental property?
Let’s pull back the curtain. What you care about isn’t just the rent you collect. It’s the cash that hits your bank account after all those quieter, annoying costs: mortgage, taxes, insurance, repairs, and the random things you don’t see coming—like a tenant’s dog chewing through the drywall (yes, it happens).
Most experienced investors chase what’s called “cash flow.” This is the money left after bills, and it’s what makes a rental fun instead of a stress magnet. A solid, widely used target is at least $200 to $400 a month per single-family home. Why? Because anything lower can get swallowed up fast if a furnace dies, or the roof starts crying for help.
Sounds small? Well, consider this: Say your place earns $300/month clear. That’s $3,600 a year. With two properties? Now it’s $7,200. Ten properties? Over $36,000 annually, and you didn’t clock in at an office. But remember, every property is different, and trying to squeeze higher profit from the wrong house can backfire—badly.
If you want to go deeper, there’s the “1% rule.” Longtime landlords talk about it all the time: If the monthly rent is at least 1% of the purchase price, you’re headed in the right direction. Buy a $200,000 rental? You’d want $2,000/month rent. That makes it easier to get decent cash flow, even after paying the mortgage and costs. But lately, housing prices outpace rents in lots of areas, so the 1% rule isn’t always realistic. In expensive coastal cities, you might see 0.5% or less. That’s when you need to be an expert at squeezing profit with smart management.
Don’t forget vacancy and maintenance. Most pros use a 5-10% “vacancy rate” in their math. Why? Even reliable tenants move out sometimes, and that lost month hurts. Throw in annual maintenance—another 5-10%—because things break, and old carpets never last forever. Overlooking these will sabotage your profit faster than you expect.
Also, don’t fall for realtors who pitch “cap rate” or “ROI” as the only thing that matters. Those numbers can be helpful, but are often twisted with guesses, future projections, or wild optimism. Instead, do real math: Calculate your real monthly expenses, subtract them from your real rent, and see what’s left. That’s your true monthly profit. If it’s below $200, brace yourself for a rough ride unless you own prime property in a booming area.
Imagine this: You close on your first rental. You brag to friends, do a few high-fives, and relax as that first rent check rolls in. Then reality shows up. Insurance is higher than you guessed. The property tax bill nearly gives you a heart attack. A pipe bursts, your tenant calls in a panic, and $800 vanishes for the plumber. Suddenly, your profit is gone—or worse, you’re in the red.
This isn’t rare. In my kid’s scout troop, three dads got burned by the same mistakes:
What makes a difference? Consistent, boring habits. Check your statements each month. Save extra cash during good times, so big repairs don’t wipe you out in bad ones. And if you want to chase true profit, get creative: Convert a garage to a studio, rent by the bedroom, offer furnished rentals to traveling nurses, or try Airbnb—if your local laws allow.
Here’s a wild fact: The top 10% of landlords almost always automate rent collection and property management. Why? Automation cuts out payday drama, late reminders, and paperwork. More free time, less stress, and fewer missed payments = higher real profit. I started this two years ago, and it’s been a game-changer.
Taxes are another sneaky way to hold onto more profit. Depreciation lets you legally write off part of the value of the structure each year—that saves a ton on your tax bill. There are also deductions for mortgage interest, repairs, and even travel when checking on your property. Always talk to a solid real estate-savvy CPA before tax season. Every dollar you keep is another dollar in your pocket.
Let’s get honest: Most properties only bring in $200 to $400 a month at first—a few coffee runs a week. But there are some solid ways to grow that number without snapping under stress.
Here’s a truth I tell friends: Landlord life can get easier as you go. The first three years are often rocky—bad hires, unexpected repairs, learning which tenants to trust. But smart systems and good habits start to stack up. You build a “repair army” of handymen you trust. Tenants call you less, because you’ve fixed the recurring headaches.
And the big one? Appreciation. Over 20 years, property values rise, and so do rents. Even if you only pocket $250/month today, your house may be worth double what you paid when your youngest heads off to college. That combines slow-burn equity with reliable cash flow—why real estate has minted more millionaires than lottery tickets.
If you want exact targets, set a minimum: don’t touch a deal under $200/month cash flow after vacancy, repairs, and all costs. Ideally, chase $400+ if you want a real buffer. More is always better, but if a place only breaks even, walk away. Your time—and sanity—are worth protecting. Real profit in rentals isn’t magic, but a mix of buying smart, running lean, treating tenants well, and always expecting the unexpected. Get these right, and your monthly profit turns from pocket change into a serious wealth builder—even if occasionally interrupted by a kid's soccer practice or a surprise furnace bill.