Rental Income Guide

Understanding Rental Income

Rental income is one of the most reliable forms of passive income. Whether through traditional long-term rentals, short-term vacation properties, or alternative rental assets, real estate can provide consistent cash flow and long-term wealth building.

Types of Rental Income

• Long-term residential: Traditional 12-month leases providing steady income
• Short-term rentals: Airbnb and VRBO properties for higher nightly rates
• Commercial properties: Offices, retail spaces, and warehouses
• Storage units: Low-maintenance rental income from storage facilities
• Parking spaces: Urban parking in high-demand areas

Getting Started with Rental Properties

Starting your rental property journey requires careful planning:

• Calculate potential returns using the 1% rule (monthly rent should be at least 1% of purchase price)
• Factor in expenses: mortgage, taxes, insurance, maintenance, vacancy
• Research local rental markets and regulations
• Consider property management vs. self-management
• Build an emergency fund for unexpected repairs

Making Rentals More Passive

True passive rental income comes from:

• Hiring a property management company (typically 8-12% of rent)
• Building relationships with reliable contractors
• Using technology for rent collection and maintenance requests
• Investing in REITs for hands-off real estate exposure