I already have a cash flow positive condo in my name and now planning on buying a townhouse with SO. How should I go ahead with it as qualifying limit from my end in the purchase is only half of rent receivable from condo and the fact that condo is investment and cash flow wise, expected rent is covering 130-140% of my monthly cost of ownership of property?

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I’ve heard different things from multiple lenders for my negative cash flow property.

One held the mortgage obligation from a rental against me, but refused to count the rent received because I did not hold the property for at least 2 years. If it was over two years, he would have counted 75% of rent for DTI calculation.

Another lender netted my mortgage payment with rent and only counted the difference against me in DTI. They would ignore any positive cash flow unless I held the rental for at least 2 years.

You should probably ask your lender.

if the rental property was purchased in 2022 and not on your 2021 taxes you can use 75% of the lease amount as the rental income. if it is on the 2021 taxes below is the calculation.

Rent received (line 3)
- Total expenses (line 20)
+ Depreciation (line 18)
+ Taxes (line 16)
+ Mortgage Interest (lines 12 & 13)
+ Insurance (line 9)
+ HOA Dues (line 19)
- Monthly PITIA (the total housing payment including HOA dues)

The result is the amount you can use for rental income. Let me know if you need help.

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