My First Rental Property: Was It Worth It?
When I bought my first rental property in 2023, I was excited, nervous, and very unsure if I was doing the right thing. I didn’t have a mentor walking me through it. I didn’t have a real estate background. But I knew I wanted to start building wealth — so I took messy action even though I didn’t feel 100% ready.
Now that it’s been almost two years, I can look back and ask: Was it a good deal? Let’s break down the numbers.
Listing Price: $68,000
Purchase Price: $65,000
Down Payment: $18,000
Loan Amount: $48,000
Interest Rate: 7.25%
Monthly Mortgage (Principal & Interest): $327
Year 1 & 2 Cash Flow
In the first year of owning the property, I rented it out for $900 per month. After accounting for all expenses, my total monthly expenses came out to $779. That left me with a monthly cash flow of $121 — or $1,452 annually.
While this might not seem like a huge number, this is very normal for the first year of a rental property. I wrote an entire blog post about it here.
Even still, it still represented a solid 8.1% cash-on-cash return on my $18,000 investment. More importantly, the property was paying for itself, covering all expenses, and putting money in my pocket each month — all without me managing it directly. For a first rental property, that kind of performance gave me confidence that I could scale.
Current Cash Flow
This year I increased the rent to $1,100 per month and I also started self managing about 7 months ago. My total monthly expenses come out to $719. That leaves me with a monthly cash flow of $381, or $4,572 annually. Based on my original $18,000 down payment, that’s a cash-on-cash return of approximately 25.4% — a strong return by any standard. The rent bump not only improved my monthly profit, but also demonstrated the strength of the local rental market. Managing it myself allows me to keep more of the cash flow while continuing to build hands-on experience and long-term equity.
Was It a Good Investment?
Yes — and here’s why:
I’m earning a 25% return on my money, and that’s before accounting for loan paydown, appreciation, or tax benefits like depreciation.
I’ve already raised the rent by $200, which boosts my long-term income and property value but it’s still $200 below market value - so there’s still more room to grow. And as I raise rent each year, my monthly cash flow will only increase.
The purchase price of the house was $65,000, it appraised for $73,000 at the time of purchase and without doing any repairs, it appraises for $90,000 today. My money is growing without me having to lift a finger.
I took action — even without everything figured out — and now I’m earning passive income every single month while building long term generational wealth.
Final Thoughts
This wasn’t a flashy deal. It was small, affordable, and honestly? That’s what made it such a great first property. It taught me how to run the numbers, manage a rental, and think like an investor without a huge risk.
Cash flow is rarely amazing right out of the gate — and that’s normal. I wrote an entire blog post about it here. In the beginning, rents are often lower, reserves feel tight, and expenses can eat into your profit. But over time, rents typically rise while your mortgage stays fixed, slowly widening your margins. What starts as modest monthly cash flow can grow into a solid stream of income — especially when paired with appreciation, loan paydown, and tax benefits. Real estate rewards patience.
The one thing I wish I did differently? Start sooner.
As the saying goes: “Don’t wait to buy real estate, buy real estate and wait.”
The takeaway: You don’t need to wait for perfect timing or the “dream deal.” You just need one that makes sense — and the courage to get started.
