How to Make Money with Rental Properties: A Beginner’s Guide

Struggling to build a steady income stream while your savings sit idle?

Many beginners are eager to get into real estate but aren’t sure how rental properties actually generate income—or if it's even worth the hassle.

They buy without a plan, underestimate costs, or set the wrong rent—and their investment bleeds money.

But with the right strategy, rental properties can become a reliable and scalable source of monthly income.

This guide breaks down how to make money with rental properties, including what works, what doesn’t, and how to earn more—especially if you're starting near Podgorica.

Let’s start with the basics and move into actionable steps you can use to turn your first property into a profitable income stream.

‍

How Do Rental Properties Make Money?

To make money with rental properties, you need positive monthly cash flow, long-term appreciation, and efficient property management. Start by buying in high-demand areas, pricing rent strategically, screening tenants, and budgeting for repairs. Rental properties near Podgorica offer strong potential with the right location and rental strategy.

Rental properties generate income in several ways. Understanding these income streams helps you make better purchasing decisions from day one.

‍

1. Monthly Rental Cash Flow

The most direct income stream is rent. Your tenant pays monthly, and you subtract all operating expenses:

• Mortgage payment (principal + interest)

• Property taxes

• Insurance

• Repairs and maintenance

• Property management fees (if applicable)

• HOA fees or utilities (if covered by landlord)

Cash Flow Formula:

Monthly Rent – Total Expenses = Cash Flow

Positive cash flow means you’re making money each month. Negative means you’re losing money—even if the property is increasing in value.

Tip: The 1% Rule is a basic screening tool. If a property costs $150,000, aim for at least $1,500/month in rent.

‍

2. Appreciation Over Time

Over the years, your property may grow in value. You won’t benefit from this monthly, but it adds to your net worth and gives you options down the line:

• Sell at a profit

• Refinance and pull out equity to invest in another property

Historically, U.S. real estate appreciates around 3.5%–5% annually (source: Federal Reserve). Similar patterns are seen in developing European markets like Montenegro.

‍

3. Loan Paydown by Tenants

Your tenant’s rent also helps you pay off your mortgage. Over time, this builds your equity stake in the property.

For example, after 5 years of renting out a property with a 20-year mortgage, you’ll have paid off a significant chunk—with the tenant covering most of it.

‍

4. Tax Advantages

Depending on your country, you may qualify for:

• Depreciation deductions

• Mortgage interest deductions

• Expense write-offs (repairs, management, travel, etc.)

Always check with a tax advisor before relying on tax benefits in your rental income strategy.

‍

What Does It Cost to Get Started with a Rental Property?

Before you see returns, you need upfront capital. Here’s a more detailed breakdown of startup costs:

Down Payment

Expect 15%–25% of the purchase price for a conventional loan. Some first-time buyer programs may offer lower, but these aren’t always available for investment properties.

Closing Costs

These include legal fees, title searches, inspections, and lender fees—usually 2%–5% of the purchase price.

Renovation or Repairs

Even “move-in ready” homes often need updates—appliances, painting, minor fixes.

Budget at least $3,000–$10,000 depending on property condition.

Emergency Reserves

Set aside 3–6 months of total expenses in cash. This helps cover repairs, vacancies, or tenant issues without stress.

‍

How to Make Money with Rental Properties Near Podgorica

Podgorica’s rental market is gaining attention due to increasing demand from students, expats, and regional workers.

If you're looking into how to make money with rental properties near Podgorica, here’s what matters:

Choose Strategic Locations

Podgorica’s city center, Blok 5 and 6, and areas near the University of Montenegro have year-round rental demand. Tenants include:

• University students

• Digital nomads

• Foreign embassy workers

• Locals priced out of homeownership

Focus on Low-Maintenance Properties

Smaller apartments (1–2 bedroom units) near key amenities rent faster and require less upkeep.

Explore Short-Term Rental Potential

Tourist hotspots like Virpazar, Lake Skadar, or Cetinje (less than an hour from Podgorica) are seeing growing Airbnb activity. These areas offer higher nightly rates, though with more turnover.

Check Legal Requirements

You may need a rental license or have to register for tax purposes. Work with a local real estate agent or property lawyer to stay compliant.

‍

Final Thoughts

If you're exploring real estate investing for beginners, rental properties are one of the most accessible and time-tested paths.

They offer real cash flow, long-term growth, and flexibility. But the key is preparation.

Start by learning your market, running realistic numbers, and focusing on steady, predictable income—not unrealistic returns.

‍

Interested in Earning Income with Rental Properties Near Podgorica?

At Objekta Real Estate, we help first-time and seasoned investors find the right rental opportunities across Montenegro.

Whether you need help with buying, rental pricing, or property management—we’re ready to assist. Contact us today to start building income through real estate.

‍