Following the case of a family looking for an investment property with a budget of $220,000 reveals common oversights in cash flow calculations. Although the rental yield appeared high in a low-rent area, the picture changed significantly after accounting for all expenses. This family started with a purchase price of $220,000 and an expected monthly rent of $1,800, planning to make a 20% down payment and finance the rest with an investment loan.

The average rent in Victorville was around $2,200 per month as of June 2026 (Zumper). Other surveys reported $2,197 (Zillow) and $1,686 (RentCafe), reflecting variations due to differences in the types of properties surveyed, such as single-family homes versus apartments. Applying the 1% rule, which checks if the rent exceeds 1% of the purchase price, is relatively easier in lower-priced areas. Victorville, located in the high desert, has lower purchase prices and rents compared to Los Angeles or Orange County. While the initial financial burden is lighter, it's important to consider that the rate of rent increases and asset value appreciation is also relatively slow.

However, the story changes when you add mortgage payments, property taxes, landlord insurance, management fees, and maintenance costs. The effective property tax rate in San Bernardino County is approximately 0.70%. If you hire a property manager, 8% to 12% of the monthly rent goes to fees, and it's common to set aside about 1% of the property value annually for maintenance. Returning to this family's case, after deducting mortgage payments, property taxes, insurance, and maintenance reserves from the expected monthly rent of $1,800, the actual amount left was about half of what they initially anticipated. When factoring in an 8% management fee for not managing the property themselves, the difference widened further.

Regarding rental laws, there is no rent control ordinance specific to the city of Victorville. The only applicable standard is AB 1482, which applies statewide in California, limiting annual rent increases to the lower of 5% plus the local inflation rate or 10%, and requiring just cause to evict tenants who have lived there for over a year.

Reviewing the loan conditions, investment loans require a down payment of 15% to 25%, which is higher than for owner-occupied properties. Credit scores can be evaluated starting at 620, but a score above 740 is needed for favorable rates, and interest rates are typically 0.5 to 0.75 percentage points higher than for owner-occupied loans (according to Fannie Mae and Freddie Mac). Banks only recognize up to 75% of projected rental income as qualifying income.

As seen in this family's case, many start by looking only at the purchase price and rent, but it's only after adding property taxes, insurance, management fees, and maintenance that the actual profit becomes clear. At the time of sale, they could also consider a 1031 exchange to defer capital gains taxes. Ultimately, this family realized they couldn't rely solely on the initial rent figures; they had to account for all expenses to determine whether the property was a good fit.

In areas like Victorville, where purchase prices are low, it may seem easy to meet the 1% rule, but thorough calculations are necessary to understand the actual cash flow. Recently, more investors have been turning their attention to the high desert region, but rather than jumping in based solely on low purchase prices, it's essential to develop the habit of tracking the numbers from start to finish, just like this family did. A low purchase price only indicates a lower initial burden; without thorough calculations, the actual profitability remains unknown. As this family experienced, the process of visually confirming the gap between the initial rent figures and the final net profit is crucial.

This article is not investment or legal advice, and it is recommended to consult with a professional to review individual circumstances before entering into any contracts.