The answer really depends on the market, specifically the cost of the property, how you’ve financed the purchase, and the rental market rates. Due to depreciation (what you can deduct on your taxes is different from a cash deduction), it’s not uncommon for a real estate investor to have a positive cash flow but negative taxable income. For example, you have a property that rents for $4,000 a month and you can depreciate $1,500 a month. You will have a positive cash flow (net $2500 a month) while receiving the benefit of minimizing taxes. It’s important to note that each taxable situation is different. To accurately answer this question for you, we’ll need to know more about the rental property, your financial picture, and then discuss your tax minimization options.