I don't understand rental properties

[Ivan Dimitrov]

Hi guys. First post here, from Sofia, Bulgaria.

I've been looking at rental properties on and off for the past few year but never purchased one. Always found other investment opportunities. But now is the time to diversify a bit, so I'm looking again.

I have a very basic question. How is rental property with a 80% bank loan profitable? From my calculations I'm always in the minus and the only way to be reasonably profitable is to be able to pay at least 50% with my own cash. I don't get the math.

Lets say, I loan 80k and invest 20k personal money. My morgage is 500 per month and the rent I can get is 400. That doesn't sound good.