Sometimes yes. A lot of the time, no.
In 2026 the difference between a smart rental and a headache is whether the property cash flows under boring, conservative assumptions. If the deal only works when everything goes perfectly, it is not investing. It is hoping.
The 2026 baseline: financing is still expensive
Mortgage rates are still high enough that purchase price and monthly payment matter more than the “long term appreciation” story.
Freddie Mac reports the average 30-year fixed mortgage rate at 6.11% as of February 5, 2026.
That rate environment punishes overpaying and rewards disciplined underwriting.
The only question that matters: does it cash flow after real costs?
Most people calculate rental income like this: rent minus mortgage equals profit.
That is fantasy math.
Real rental math includes:
- Vacancy
- Repairs and maintenance
- Property management (even if you self manage, budget it anyway)
- Property taxes
- Insurance
- HOA or condo fees if applicable
If you do not subtract those, you are not evaluating a rental. You are evaluating a payment.
Rent growth is not guaranteed in 2026
You cannot bank on big rent increases to rescue a thin deal.
Realtor.com forecast materials point to rents ending 2026 about 1% lower overall.
That does not mean your specific neighborhood cannot outperform. It means you should underwrite using today’s rent and modest increases, not aggressive growth.
A quick “worth it” test you can run on any property
A rental is usually worth considering when it survives a stress test.
Start with three numbers:
- Cash flow: what is left after all expenses, not just the mortgage
- Cash on cash return: annual cash flow divided by total cash invested
- Break even occupancy: how occupied it must be to not lose money
Then pressure test it:
- Assume at least some vacancy every year
- Budget a real maintenance reserve
- Assume insurance can increase
- Assume you will pay for management at some point, even if not today
If it still produces acceptable returns after that, you are looking at a real investment.
The biggest deal killers in 2026
Thin margin deals
At around 6% mortgage rates, many properties look “close enough.” Close enough is how you end up working a second job to subsidize your tenant.
Underestimating ownership costs
Insurance and HOA fees are the most common surprise costs that destroy cash flow. This is especially true in markets where those costs are volatile.
Buying based on appreciation
Appreciation can happen. It can also stall. A rental should stand on its own without needing price growth to justify the purchase.
Fannie Mae expects mortgage rates to end 2026 around 5.9% in one of its outlooks, but that is a forecast, not a guarantee.
Treat refinancing as upside later, not a requirement for survival.
A short note for Florida readers without overcomplicating it
If you are buying in Florida, do one extra step before you commit: lock down insurance assumptions early.
Citizens Property Insurance Corporation states that by January 1, 2027, most personal residential policies with wind coverage will be required to have and maintain flood insurance under a phased in approach.
If you are buying a condo in Florida, also be aware that condo reserve and inspection compliance can affect dues and special assessments. Florida DBPR summarizes SIRS deadlines, including a December 31, 2025 deadline for many associations, and an option to align with milestone inspections with a December 31, 2026 completion deadline in those cases.
This matters because unexpected assessments can erase cash flow quickly.
That is all you need to remember: price insurance realistically and treat condo docs like required due diligence, not paperwork.
Bottom line
Buying rental property in 2026 is worth it when:
- The deal cash flows after real expenses
- You have reserves
- You are not relying on rent spikes or appreciation to make it work
- You can hold long enough for the business model to play out
