Gaining experience as a landlord

5 Replies

Happy Thursday to everyone, I need some information, hopefully somebody here can help me. I know that when you are investing on a multifamily or apartment building, when you apply for a loan in order for the banks to take the rent money in consideration as income, you must have some management experience. Like two years minimum or something like that. I’m getting ready to rent out one of my homes that I owe, and I’m planing on managing my self because I want to get this experience as a landlord. So that I can use this experience when I apply for a mortgage for my next investment. With all of that being said now my question is, what type of documentation do I need to keep to prove to the banks in the future that I have been managing this property my self??

@Maria Luna

The documentation is the schedule E from your federal tax returns. You should keep track of income and expenses to put together a profit and loss statement, which will ultimately go onto the schedule E (rents and royalty). 

You should open a bank account for rents only. This way in case, lender ask for additional information, they will surely ask for bank statements of rentals. If you co-mingle with your own funds then it can be messy. Also, if you have more than one credit card (MC/VISA), use one exclusively for rental, will help keep track of expenses. 

Terry

Originally posted by @Terry Lao :

@Maria Luna

The documentation is the schedule E from your federal tax returns. You should keep track of income and expenses to put together a profit and loss statement, which will ultimately go onto the schedule E (rents and royalty). 

You should open a bank account for rents only. This way in case, lender ask for additional information, they will surely ask for bank statements of rentals. If you co-mingle with your own funds then it can be messy. Also, if you have more than one credit card (MC/VISA), use one exclusively for rental, will help keep track of expenses. 

Terry

@Terry Lao

Thank you so much for this information. How do I put together a profit and loss statement? I already got my separate bank account just for the rental property.

I just downloaded it. Thank you so much for this information.

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