How much money do you need to buy a rental property?

Short answer

Expect to need 25–30% of the purchase price in cash for an investment property: a 20–25% down payment, 2–5% in closing costs, plus renovation budget and reserves. On a $300,000 property that is roughly $75,000–$95,000 all-in.

Cash required on a $300,000 rental purchase

Cost	Typical amount	Notes
Down payment (20–25%)	$60,000–$75,000	Investment loans require more than owner-occupied
Closing costs	$6,000–$15,000	2–5% of price
Initial repairs / turn	$3,000–$25,000	Condition dependent
Reserves (6 months PITI)	$9,000–$14,000	Often lender-required
Total cash needed	$78,000–$129,000	26–43% of price

How to read this table

Total cash needed sits at the top of the table ($78,000–$129,000) — 26–43% of price. If your situation looks like this row, plan against the upper half of the range rather than the midpoint.
Initial repairs / turn anchors the bottom ($3,000–$25,000) — condition dependent. Treat this as the conservative case you should still be profitable at.
The gap between the top and bottom row is roughly 43×. That spread is why a single blended average is close to useless here — pick the row that matches your setup instead of averaging the column.
Most rows are ranges, not single figures. The low end usually reflects a weaker month, a softer audience geography, or an unoptimised setup; the high end reflects a well-run, well-targeted operation of the same size.
With 5 reference points in the "cash required on a $300,000 rental purchase" table, the fastest way to use this page is to find the closest row, take its typical amount, then stress-test it ±30% before you build a plan on it.

Context

Investment-property lending is stricter than primary-residence lending in three ways: higher down payment, a rate premium of roughly 0.5–0.875%, and required cash reserves after closing. House hacking is the standard workaround — living in one unit of a two-to-four-unit property qualifies for owner-occupied terms and down payments as low as 3.5–5%, at the cost of living in your investment for a year. Whichever route you take, budget the reserve separately from the renovation; the two are not interchangeable.

What moves this number

Financing terms

Rate, down payment and amortisation drive cash-on-cash return more than purchase price does. The same building can cash-flow or bleed depending on the loan.

True operating expense ratio

Management, insurance, tax, maintenance, vacancy and capital reserve typically consume 35–50% of gross rent. Models that skip reserves overstate returns badly.

Vacancy and turnover

One 45-day vacancy plus a turn can erase a year of thin cash flow. Underwrite 5–8% vacancy even in tight markets.

Local regulation

Rent rules, short-term rental caps and licensing requirements change the achievable revenue of an identical property between neighbouring cities.

Methodology

Conventional investment-loan requirements combined with typical closing-cost percentages and lender reserve rules, applied to a $300,000 purchase price.

Assumptions and caveats

Returns exclude appreciation and principal paydown unless a row states otherwise.
Local tax, insurance and regulation can move these figures by several points in either direction.
This page was last reviewed on 2026-08-12. Ranges are updated as new data lands, so re-check before using them in a contract or a plan.
Use these numbers as a starting range, not a guarantee — your own historical data always beats a benchmark.

Frequently asked questions