How do lenders view rental income from tax returns?
Hopefully someone can help me understand this, as it’s a delicate balance. I’m incentivized to deduct as many legit expenses as possible to lower my tax liability but on the other hand this may hinder how a lender views my debt to income.
Is there a best way to look at this on each property? I would hope they add back interest and depreciation- so should I have that net income number (after adding back interest and depreciation) be 1.25x of my mortgage principal and interest?
Thank you
FYI this is for residential lending