Financing rental property requires more capital and documentation than a primary residence. This guide outlines qualification rules, income treatment, and lender expectations so you can scale your portfolio confidently.

Key takeaways

• Expect 15% to 25% down payments and six months of reserves for each financed property.
• Lenders often apply a 25% vacancy factor to rent before counting it toward income.
• Short-term rentals require additional underwriting, including documented occupancy permits and insurance proof.

Qualify with adequate reserves and credit

Document liquid reserves covering at least six months of payments for the subject property and any other financed rentals.

Keep credit scores above 680 to access the best investor pricing and to limit loan-level price adjustments.

• Verify reserves with bank statements, retirement account snapshots, or brokerage statements.
• List each property address, payment, and rental income on a real estate owned (REO) schedule for the lender.

Calculate rental income the lender way

For existing rentals, lenders average documented rents from tax returns or leases. They subtract a vacancy factor before adding income to your DTI.

For new purchases, an appraiser provides a rent schedule (Form 1007) to support expected income. Lenders typically count 75% of that number.

• Keep signed leases organized and highlight rent amounts for each tenant.
• If rents are short-term or seasonal, gather 12 months of booking statements to prove stability.

Optimize loan structure for cash flow

Compare adjustable versus fixed terms. Investors sometimes prefer 5/6 ARMs for lower rates, especially if they plan to reposition the property in five years.

Consider interest-only periods on DSCR loans to maximize cash flow during renovations or lease-up phases.

• Use our calculator to model payment differences between investor loan products.
• Evaluate prepayment penalties on DSCR or portfolio loans before committing.

Action steps to take next

1. Create a personal REO schedule with loan balances, payments, and rents before you apply.
2. Collect 12 months of operating statements for multifamily assets.
3. Review specialty lender options (DSCR, bank statement loans) if traditional underwriting is tight.

Mortgage questions answered

Can I use projected Airbnb income to qualify?

Some lenders allow it with 12 months of history, tax returns, and proof of required permitting. Expect stricter reserves and pricing.

How many financed properties can I have?

Conventional loans cap at 10 financed properties. Portfolio lenders may allow more with higher reserves and down payments.