Build rental cash flow: lock a fixed payment, keep a six-month cushion, add one door at a time.

Hand holding house-shaped keychain and keys — adding one rental “door” at a time

One-line recap of Part 1

We locked spending to what’s predictable: pay cards in full each month, cap the car at ≤6× monthly income, and buy a home in a good location with a 30-year fixed while keeping housing ≤30% of take-home pay. Now we apply the same logic to rental property—so it supports retirement, monthly cash flow, and a small side business.

The day I toured my first rental

The agent said, “Expected rent is $2,300, HOA is $180, property tax is….”
I opened my notebook and ran the numbers.

Expected rent: $2,300
PITI (principal, interest, taxes, insurance): $1,650
Operating costs (light maintenance, shared utilities, misc.): $120
Vacancy/CapEx reserve (10% of rent): $230

Math: 2,300 − 1,650 − 120 − 230 = +$300, which means—by the numbers—you’ve cleared the first gate for cash flow.
The agent asked, “Want a property manager? Eight percent fee.”
“This one I’ll self-manage. Catching small issues early prevents big repair bills.”

My screen (extending Part 1’s rules)

Location + cash flow: Rent should cover PITI + ops + a 10–15% vacancy/CapEx reserve and still be positive.
Fixed rate: Always 30-year fixed to kill rate volatility.
Reserves: Six months of PITI in cash before closing.
Management plan: Self-manage by default. A rental is still my house—seeing it often lowers repair costs. And a good tenant relationship is the best “maintenance” and the best cost control.
After-tax lens: Decide on after-tax cash flow—model depreciation and interest (your situation may vary).

Three moments with a tenant

9 p.m., leak call. “Could you text a photo? I’ll assign a tech for tomorrow morning.” Quick fixes stay cheap. Fast response = small cost.
60 days before renewal. “Let’s keep rent flat; I’ll handle filter replacement and light paint touch-ups.” Vacancy is the priciest line item; retention wins.
30 days before move-out. I send a checklist for cleaning, minor repairs, and key hand-off. On move-out day there’s less to fix. That’s the payoff of steady care.

Why rentals? Three compounding effects

Retirement: As the mortgage amortizes, net rent starts to feel like a personal pension.
Cash flow: A second stream alongside your paycheck boosts resilience.
Side hustle: Even small scale builds an owner’s mindset and local market instincts.

Manage risk with numbers

Rates: Fixed is your base defense. If the market improves, have a refi scenario sketched out.
Vacancy: Underwrite for at least two months of vacancy; cover shocks from your 6-month PITI cushion.
Repairs: Handle minor fixes immediately; for major jobs, get three bids. Routine inspections prevent surprises.
Documentation: Treat it like a business—keep leases, in/out flows, and repair receipts organized.

A note toward your next door

In Part 1, we fixed spending so life stays predictable.
Part 2 is simple: on top of that structure, add one door at a time.
Over time, cash flow, retirement income, and a real side hustle begin to follow—quietly, then clearly.

On the drive home I wrote one more line to myself:
Keep the rules, scale one notch at a time. Today’s notch becomes tomorrow’s ladder.

Educational, not financial advice.