Debt to income or no

[Nicholas Preston]

I have 5 rental properties now but am concerned my debt to income could be a problem soon to finance more properties. I know a big determining factor with banks is your tax returns and how much you actually made that year after expenses. Do I always want to take the maximum deductions and make my income lower which may look bad to a bank but better for paying lower taxes or maybe not take all deductions so my debt to income looks better but pay higher tax? What is the general thinking on this subject, I'm trying to think more long-term. Thanks!!

[Blake Pullin]

Most lenders will add back depreciation to increase your actual qualifying income. Other deductions (repairs, expenses etc) are not added back. A good lender will discuss strategies with you before you file your tax return so don’t hesitate to ask them. They want you to show as much qualifying income as possible and many times there’s still a way to do that with minimal increase in your tax liability.