There was a consultation in Staten Island about whether it would be possible to supplement living expenses with rental income after retirement. The individual was curious about whether it would be better to rent out their current home without selling it or to use that money to purchase a separate rental property, but both options ultimately need to be compared on the same calculation framework to find an answer.

The average rent in Staten Island in 2026 is around $3,000 per month (Zumper), and the median home price is about $750,000 (as of the first half of 2026). Dividing the annual rental income of $36,000 by the purchase price gives a total return of 4.8 percent. This is favorable, but considering that the effective property tax rate in Richmond County, where Staten Island is located, is relatively low at 0.91 percent (StreetEasy), the picture may look even better.

However, there are more factors to consider. The property tax for a $750,000 property is about $6,825 per year, and you also need to add insurance, maintenance costs, management fees if you hire a property manager, and vacancy losses. Using the 50 percent rule to estimate net operating income, it comes out to around $18,000 per year, and the cap rate would be around 2.4 percent. The difference between the total return of 4.8 percent and the cap rate of 2.4 percent is particularly important to consider if you expect stable cash flow after retirement.

It's also important to address the downsides. If you plan to use this for retirement funds, the impact of vacancy periods or unexpected repair costs on cash flow can be significant. On the other hand, a positive aspect is that if you rent out a home you already own, you won't incur closing costs associated with a new purchase, making the cash-on-cash return calculation simpler.

When comparing the option of purchasing a new rental property, there is one more factor to consider. A new purchase requires initial cash for the down payment and closing costs, but you can apply tax benefits like depreciation. In contrast, renting out an existing home has no initial cash burden, but the depreciation potential is likely already significantly exhausted. Which option is more favorable for securing retirement funds should be evaluated in conjunction with a tax advisor based on personal circumstances.

One more factor to consider is the management method. If managing tenants directly after retirement seems burdensome, you may opt for property management, which typically takes 8 to 10 percent of rental income as management fees. If you factor in management fees to the previously calculated net operating income of around $18,000, the cap rate could drop to the low 2 percent range. Choosing between direct management and property management is also a variable that ultimately affects the cap rate. If you have time after retirement, managing directly can increase the cap rate, but it's wise to anticipate the burden of handling tenant interactions and repair requests yourself. Ultimately, deciding on a management method is one of the choices that can determine how much you can narrow the gap between cap rate and actual perceived income.

To summarize the factors to check in order:

• Check total return using annual rental income and purchase price (or current market value)
• Calculate cap rate using net operating income after deducting property tax, insurance, management fees, maintenance costs, and vacancy losses
• If there is a loan balance, check actual cash flow using cash-on-cash return that includes repayment amounts

In retirement fund planning, you need to consider not only cash flow income but also capital gains and asset growth from loan principal repayment to fully understand total returns. Property tax rates and rental prices can vary based on county and property conditions, so be sure to verify the latest data in real situations. This article is not investment or legal advice, and it is advisable to consult with real estate professionals and financial advisors before making actual decisions.