Does owning a rental property affect eligibility?

In some states, all rental income property is exempt for Medicaid eligibility purposes. So first find out if that is true for your state by checking with your state Medicaid bureau.

If it is NOT exempt, then indeed the net rental income would be countable income for Medicaid purposes. But all states permit a person with “excess” income to spend it down on medical or nursing home bills, so excess income is rarely an issue, even if you are technically over the limit.