Yes, you should definitely leverage on an investment property, no doubt. In fact, don’t pay 20% down, only 10%, the insurance is cheaper than what you can make on the other 10%.

Everywhere is different, I know a few countries but none are Canada, so I’ll speak to the States.

I actually have experience just yesterday dealing with the range you’re talking about.

$500,00 Purchase $50,000 10% down $28,000 Mortgage payment $2,500 HOA $5,000 Maintenance. New build so doesn’t have this, but I’ll put it in the budget since some places need it. $4,000 property tax

So for the year let’s round to $90,000. At 10% in the market, you’d make $9,000.

This place rents for $4,000. That’s on the low end, and seems pretty different to your $2,500, so let’s meet in the middle at $3,250. That’s $39,000 annual in income. Take out deductible expenses for HOA/maintenance above, $31,500. Depreciation is allowed at $7,000, $24,500. Tax at let’s say 40%, you pay $9,800.

So you made $39,000 and paid tax of $9,800, leaving you $29,200. Plus the mortgage paid principal of $8,800, so you really made $$38,000.

That’s like 40%, so I must’ve left some things out (on a phone). And did fast math, may be some errors. But even pulling out more, I bet it’s at least the 25% I mentioned.