Rental Income - Underwriting Fundamentals 101
Rental Income
This here is super important for real an investor.
The lenders have either an ad to income policy for the rental income or they have what's called an offset policy.
And every lender has their own percentage rate.
So it can be 50%, 80%, or even 100%, depending on the lender.
And if we're using a rental worksheet and all the other things. But anyways, can deduct it all down.
When you're adding the rental income to the income, you still have the property expenses.
So the ad income method is the method that most of the lenders use.
However, it is the least attractive to get an investor the maximum mortgage.
Now when you do an offset, what that does is it subtracts, it uses the income to subtract the expenses on the property.
So if you're if you've got good income and low expenses and it erases itself, then it almost acts as if that property is not there alone.
You would just keep buying and buying and buying.
So knowing this, when we figure out what lender to use for your purchase, this is super important and I hope this helps to maximize your rental portfolio.
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