How to use income from current rental for future loan

[Ryan Moore]

I've had my first rental for over a year right now. I've been told that lenders will factor in my rental income into my DTI to help secure a loan for another property purchase. A couple questions:

1) How long do I have to own my current rental before that income can be used for my DTI

2) Where do they get the income number from... is it net operating income, etc?

[Harjeet Bhatti]

The lender will take income from Sch E if its on your tax return. If its not on your tax return and its for short period of time than 75% for your  gross rent.