Rental Income Rule: How Much Should You Earn From Your Property?
When you buy a rental property, the rental income rule, a simple guideline used by investors to judge if a property will make money isn’t about fancy math — it’s about whether the rent covers your costs and leaves you with cash in hand. Most experienced landlords follow the 1% rule: if your monthly rent is at least 1% of what you paid for the property, you’re likely on solid ground. So if you bought a place for $200,000, you should aim for at least $2,000 in rent each month. It’s not a law, but it’s a starting point that separates good deals from risky ones.
But the rental income rule, a simple guideline used by investors to judge if a property will make money isn’t the whole story. You also need to think about cash flow real estate, the actual money left over after paying all property expenses. That means subtracting mortgage, taxes, insurance, maintenance, and vacancy costs from your rent. A property might hit the 1% rule but still lose money if repairs eat up half the rent. And then there’s ROI rental, the percentage return you get on your total investment — which matters more if you put down a small down payment. In places like Virginia or London, high rents can make even small apartments profitable, but in cities with strict rent controls or high taxes, the numbers can turn ugly fast.
What most new investors miss is that the rental income rule changes depending on where you are. In high-demand UK cities, short-term rentals often beat long-term leases in profit. In India, a 2-room resale flat might bring in steady rent with low turnover. And in Utah, where land is expensive, you need higher rent just to break even. The key is not just chasing high rent — it’s matching the property type to the market. A T4 apartment in the UK might rent for more, but it also costs more to maintain. A 550 sq ft unit might be cheaper to buy, but can it really cover your bills? The posts below show real examples — from what landlords in Virginia actually charge, to how brokers in London help find tenants, to how math turns a simple rent number into a real profit. You’ll see what works, what doesn’t, and how to spot a deal that actually pays off — not just on paper, but in your bank account.
Do You Really Need 3x the Rent to Rent in Virginia? Virginia Rental Requirements Explained
Curious about Virginia rentals and the three times the rent rule? Here’s a breakdown of what landlords actually want, what’s required by law, and smart moves for renters.
- July 7 2025
- Archer Hollings
- 0 Comments