Build an operating budget
Start with realistic rent, then deduct vacancy, maintenance, management, taxes, insurance and other operating expenses. Add debt service separately.
Assess the whole portfolio
Prepare a schedule of properties with ownership, rents, mortgage balances and payments. Lenders evaluate existing obligations as well as the new purchase.
Test the downside
Model higher expenses and a period without tenants. Keep liquidity for unexpected repairs and renewals.
Separate advice roles
Confirm tax structure with an accountant, tenancy and ownership matters with legal counsel, and financing with your broker.
Put the guide to work
Prepare your documentsGeneral educational information. Your lender, legal and tax requirements may differ.