An investor's claim of $6,000 in monthly after-tax rental income highlights a significant but achievable goal. Analysis shows this often requires a portfolio of 10-15 properties and strategic, hands-off management to maintain its passive nature.
October 3, 2025
Source:
MarketWatch
Portfolio Scale and Strategy
An investor's claim of generating $6,000 in monthly passive income after taxes from rental properties has drawn attention to the strategies required to achieve such a figure. This level of return, while substantial, is a recognized target within real estate investment circles.
Achieving this income typically requires a significant property portfolio. Financial experts and real estate educators often use a simple formula to estimate the scale needed.
Calculating the Portfolio Size
Assuming an average net cash flow of $500 per property per month—a common benchmark after accounting for expenses and taxes—an investor would need approximately 12 units to reach the $6,000 mark.
Number of units = $6,000 / $500 per unit = 12 units
This calculation is frequently featured in investment guides, with some tutorials outlining blueprints to reach similar monthly income goals by scaling property ownership. As demonstrated in various real estate walkthroughs, the key is consistent acquisition and management.
Alternatively, fewer properties located in luxury or high-rent metropolitan areas could produce the same results, though this approach requires higher initial capital.
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Source:
Morningstar
The 'Passive' in Passive Income
For rental income to be truly passive, the owner's involvement must be minimal. This distinction is critical for both lifestyle and tax purposes.
The Role of Property Management
Most investors achieving high levels of passive income rely on professional property managers. These firms handle the day-to-day operations that would otherwise demand an owner's active involvement, including:
Tenant screening and communication
Rent collection
Maintenance and repairs
Handling evictions and legal compliance
By outsourcing these tasks, the income stream becomes less labor-intensive and aligns with the definition of passive income.
IRS Classification
The IRS makes a clear distinction between passive and active income. According to tax resources like Azibo, rental income is generally considered passive as long as the owner does not "materially participate" in the management. Hiring a property manager is a primary way to ensure this classification. Without one, an owner's direct and substantial efforts could reclassify the income as active, changing its tax implications.
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Source:
Morningstar
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