So how much rental income makes a property a good investment? For starters, a “good” rental property is cash flow positive.
I aim for between $300 and $500 per month per property in positive cash flow. The Owings Mills property in this example is not my best cash-flowing rental asset. It was the first property I bought, and I’ve learned a lot since then. I moved away from buying condos after this one. Still, this property has a decent profit margin and I have a great tenant, so I’m not looking to sell.
If you rent to a Section 8 tenant, you can typically charge a higher rent. For example, I previously rented a property to a Section 8 tenant for a rent of $1,500. That’s $75 more per month than the current $1,425. The government wants landlords to make properties available for Section 8 tenants, so it will pay a bit more like a subsidy for the hassle of a little more administrative work and jumping through a few hoops, such as an annual inspection whether there’s tenant turnover or not. As long as you screen your tenants thoroughly, you might consider accepting Section 8 vouchers.