Everyone loves earning extra income, but some hustles aren’t very lucrative for the average person… *cough* 96 cents as a KDP Author and 5 dollars a month i-say survey profit *cough*.

So maybe you’re thinking to yourself, “This girl needs to stick to her day job, she is NOT a successful side hustler!”.  And for the most part, you’d be right. However, I have been very successful at one particular side hustle that has to do with the housing industry.
Again, I know what you’re thinking… “But you’ve already told us about your abandoned real estate career, So what are you trying to pull!?!?”

Well, it’s true, once upon a time my love for all things property blinded me into thinking I could pull off a successful real estate career whilst working a full time job. And that did NOT go well. But after that experience, I was able to refocus my priorities and realized that although I loved the real estate market, I needed something better suited to my lifestyle. 

So Last Year, I Became A Full Blown Landlord

I was living in a small town North of Toronto, doing my daily commute, living my life, when I was offered a job opportunity in New Brunswick. That’s a good 15 HOUR drive from my home in Ontario. But we decided to go for it! So we packed it on up and moved it on out.

I Wasn’t Ready To Sell

What if my job was a bust? And What if I hated my new city? Even worse, what if I couldn’t find good sushi!?!?! These were legit concerns. So I decided to keep my Ontario home as an insurance policy just in case things went awry. (Don’t worry, Fredericton & Oromocto have excellent sushi!) 

But How Much Should I Charge For My Income Property?

In order to afford my home in Ontario and a home in New Brunswick, I needed my Ontario house to pay for itself. I didn’t want to subsidize the carrying costs in any way, shape or form. This may sound pretty obvious, but a lot of people fail to consider the basic costs of running an income property. For example, we hear a lot of people talk about how great the return is on a rental home, but it’s only great if you can afford the expenses AND you’re making a profit.

First I Added Up The Necessities For A Single Month:


Pretty Basic. You have to cover AT LEAST the cost of your monthly mortgage payment.

Home Insurance

You MUST tell your insurance company that you’re no longer living in your home and you want to rent it out. You’ll also have to notify your mortgage company if your insurance company doesn’t do it for you. AND you should also let your tenant know they need contents insurance because your insurance won’t cover their personal belongings. So make sure you do all of those things if you’re thinking of renting out your former home, and build the new insurance price into the rental amount.

Property Taxes

Figure out what your annual property taxes are, divide it by 12, build it into the rent…Easy. Even easier, get your property taxes added onto your mortgage. The mortgage company pays the taxes on your behalf when they come due, and you have one less payment you have to remember or worry about. 


I think this is one gets overlooked a lot. Houses don’t just repair themselves! And as a landlord, you’re on the hook for things like roof repair, appliances, furnaces & A/C… you know, all the expensive stuff. So make sure you do a reasonable projection of when you think these repairs will happen and then build that into the cost of your rent accordingly. Gail Vaz Oxlade has a great post on Home Maintenance Costs which any home owner (landlord or not) should read. #Iheartgail

Emergency Fund

I also factor in a small emergency fund amount, around $75/month for a total of $900 a year. I put this cash aside for any unforeseen or unexpected emergencies. Maybe I’m an over planner (yes I am) but I think having a small contingency fund helps to relieve the stress of owning a property 15 hours away! 

Seriously Though, I Can’t Stress The Maintenance Thing Enough

I knew when we rented out our home last year, that the roof was only going to last another 1 maybe 2 years tops. So the maintenance portion of the rental income built up, and this Spring I was able to get the house re-roofed at no cost to me, score! Now I don’t have to worry about re-roofing the house for another 15 or so years! I can now allocate that maintenance money to other things that need fixing… Like the washing machine that recently went kaput last month. Womp Womp. Maintaing your rental property is really important. If you expect high quality tenants, then you better be willing to do the work, and give them a high quality home… But I digress…

I Considered The Amount Of Rent The Market Will Bear

So lets say you’ve added up all of your necessities and you have to charge at least $1000 to cover the basics. BUT the rental market is hot in your area and you can actually get $1500 for your property… SCORE! This is where the immediate profit comes in! That’s 500 dollars of cold hard cash in your pocket, every. single. month. AND if your property is in an area where homes are appreciating in value, then you’re also building equity while someone else pays your mortgage. It doesn’t get any better than that! Dear Real Estate Market, please don’t burst.

Rental Formula For My Income Property:

Mortgage + Insurance + Property Taxes + Maintenance + Emergency Fund = The Basics

If you can charge just the basics, then you’re breaking even in my books. If the Market will bear more than The Basics… CHARGE THAT!!

Market Rate – The Basics = Rental Profit

I Caught The Landlord Bug And Now I Can’t Stop!

Here in New Brunswick, we were sure to find a house with a basement apartment to help subsidize the cost of living. Right now we’re only interested in renting the apartment from September until the end of April because the entrance to the apartment is in the backyard and we practically live back there during the summer. Luckily, that timing happens to coincide perfectly with the post-secondary school year. And there just happens to be a University & College in my city! Ok, ok, maybe it wasn’t all luck… Maybe we planned that just a little bit.

Last fall the apartment was rented to a single tenant for $695 a month inclusive of utilities. The apartment didn’t have laundry and the kitchen had no prep room or storage to speak of. So, we factored those future expenses into the rent and made enough to cover last winter’s utility bills, a snowplough service (what it was my first winter in New Brunswick, I was scared of being snowed-in!!), and we purchased a stackable washer-dryer for the apartment.

This summer, thanks to my handy husband’s efforts, we’ve installed the washer-dryer and made a practical kitchen prep area, so we’ve increased the rent to $750 for a single tenant. We also invested in our own snowblower, so over time, we will save on that expense too. 

Rental Formula For The Basement Apartment:

The makeup of this rental amount is a little more subjective since my goal isn’t to cover ALL of “The Basics” mentioned above. To me, breaking even on my basement apartment means being able to cover my tenants utilities…

Utility Usage From My Tenant = $150/ month 

And a small maintenance amount = $25/month

Everything else is profit that I put towards various things that I would otherwise be paying out of pocket for… Like that new snowblower, our mortgage, and other items in our budget that take priority.   

Kicking Your Rental Formula Up A Notch

As I mentioned, I got into the income property game by chance, thanks to an out of Province job offer. My goals aren’t necessarily the same as someone who purchases income properties as their main source of income or investment. Paula Pant of Afford Anything is kind of a guru when it comes to passive income from rental properties in the States. I think she’s up to SEVEN properties now?!?! She adheres to a One Percent rental formula when narrowing down her options on new investments. The One Percent concept means that the gross monthly rent should be at least one percent of a property’s final sale & renovation price. By sticking to this rule, you’ll be able to pay off a property within a decent timeframe while weeding out potential investments that might take a long time to pay off. What I’m getting at here is… If you’re interested in purchasing properties from a pure investor stand point, and you’re looking for more detailed formulas & information, then you should probably check out here blog, ‘cuz I don’t know squat about that stuff! 

What about you? Do you have a particular rule or formula when it comes to deciding what to charge for your rental properties?