Net income is the amount of money left after all expenses are paid. Expenses include repairs and maintenance of the property, legal fees, accounting fees, taxes, insurance, and management. The bank will want to see net income equal to about 120 percent of the monthly mortgage payment. If the property is already rented, they will look at the actual rents. If not, they will look to the appraiser to indicate market rents.
Appraisers evaluate income property by comparing the rents at similar nearby properties.
These rents are adjusted for factors relating to the size of the rental units, the overall condition, and convenience to transportation, schools, and shopping. Being a landlord is not for everyone. Beyond the rental income comes the problems associated with dealing with tenants and property maintenance. It got to be too stressful. I eventually sold all the properties.