How Many Rental Properties to Retire

If you’re dreaming of retiring on rental income alone, you’re not alone. Many Canadians and Americans want to ditch their 9-to-5s and live off the steady cash flow of rental properties. But here’s the million-dollar question: how many rental properties do you actually need to retire comfortably? The answer depends on your income goals, property cash flow, expenses, and financial strategy — and we’ll break it all down right here. By the end, you’ll know how to calculate your target and how to model it with the Retirementize online income calculator.

What Determines How Many Rental Properties You Need?

The number of rental properties you need to retire depends on several factors: your desired income, property cash flow, expenses, financing, and how hands-on you want to be as a landlord. Let’s unpack each one.

Your Desired Retirement Income

Start by defining your retirement lifestyle. Do you want to travel the world, or live modestly by the lake? According to a recent Retirementize article, the average couple in Canada needs between $4,000 and $7,000 per month for a comfortable retirement. Let’s use $6,000/month as our example goal.

Cash Flow per Property

Cash flow is king. After expenses — mortgage, taxes, insurance, maintenance, and vacancies — a healthy long-term rental should net around $400–$800 per month. In high-demand markets, it can be more; in smaller towns, less. Let’s assume each of your properties nets $600/month in cash flow.

With a goal of $6,000/month, that means: $6,000 ÷ $600 = 10 properties. That’s your baseline if all homes are mortgaged and generating positive cash flow.

Financing and Mortgage Payoff

If your properties are fully paid off, your required number drops dramatically. A paid-off property could net $1,200–$1,500 per month, cutting your needed total to just 4–5 properties. That’s why many investors plan to pay off or refinance strategically before retirement.

Taxes and Depreciation

Rental income is taxable, but there are many deductions — mortgage interest, property management, insurance, and depreciation. According to the Canadian Real Estate Association, landlords can reduce taxable rental income by up to 25–30% through deductions and depreciation, which helps increase net yield over time.

Risk and Diversification

Avoid putting all your eggs in one market. One city’s downturn or vacancy spike could derail your income. Many investors balance a mix of single-family homes and small multi-unit properties in different regions to protect against risk.

Example Scenarios: How Many Properties to Retire?

Example 1: The Modest Retiree

Target income: $4,000/month. If each property nets $500/month, you’ll need 8 properties. With leverage, this could be achieved gradually by reinvesting rental profits into additional units.

Example 2: The Comfortable Retiree

Target income: $7,000/month. If each property nets $700/month, you’ll need around 10 properties. This approach might combine a few higher-value homes with smaller duplexes for balance.

Example 3: Mortgage-Free Living

Once your properties are paid off, your cash flow doubles or triples. You might only need 4–5 fully owned rentals to hit $6,000/month. This is where the Retirementize income calculator shines — test scenarios for mortgage payoff dates, inflation, and property growth.

Example 4: Scaling Smart

Some retirees buy a mix of smaller, easier-to-manage homes. For example, five townhouses earning $1,000 each may be easier to maintain than ten single-family homes scattered across a city. Fewer doors, more control.

The Math Behind Rental Income Retirement

Here’s how to calculate your net rental income:

Monthly Rent: $2,000  
- Mortgage: $1,000  
- Taxes: $200  
- Insurance: $100  
- Maintenance & Vacancy: $100  
= Net Income: $600/month
                

With ten such properties, that’s $6,000/month or $72,000/year in retirement income — before taxes. You can run this calculation instantly with the Retirementize calculator to see how many units meet your income target.

Renting vs. Selling: Which is Smarter for Retirement?

At some point, every landlord wonders: should I keep renting or sell my properties and live off the proceeds? Let’s break down both sides.

Pros of Renting

• Steady income for life (especially if properties are paid off).
• Appreciation continues — your assets can grow while you collect rent.
• Inflation protection — rents typically rise over time.

Cons of Renting

• Maintenance, vacancies, and tenant management stress.
• Property taxes and repairs can eat into profit.
• It’s less liquid — selling a home takes time and effort.

Pros of Selling

• Instant access to cash — you can reinvest or diversify.
• No landlord headaches or risk of damage.
• Potential to reduce exposure before market downturns.

Cons of Selling

• Capital gains taxes can significantly reduce proceeds.
• You lose passive income and future appreciation.
• You may need to find another investment to generate income.

Many retirees take a hybrid approach: sell a few properties to pay off others. This creates a manageable, mortgage-free portfolio that generates steady income with less stress. You can model both options in the Retirementize income calculator to see which yields the best results for you.

Transitioning to a Passive Retirement

If you’re tired of fixing leaky faucets and midnight calls, consider hiring a property manager or investing in low-maintenance condos. Alternatively, you can downsize your portfolio to a few higher-yield properties.

Another strategy is to use the proceeds from selling rentals to buy real estate investment trusts (REITs) or income-producing ETFs — keeping your real estate exposure but gaining liquidity and simplicity.

Common Mistakes to Avoid

• Overestimating cash flow — always include maintenance and vacancy costs.
• Failing to budget for taxes and insurance increases.
• Buying too many properties too quickly without solid financing.
• Ignoring diversification — don’t rely on one neighborhood or city.

Conclusion

There’s no one-size-fits-all number of rental properties to retire. For some, five paid-off homes is plenty. For others, ten leveraged units provide both income and appreciation. The key is knowing your target and planning your cash flow wisely. Use the Retirementize online income calculator to experiment with income levels, expenses, and growth rates — and discover exactly how many properties you’ll need to live your dream retirement.

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