Rental income increases DTI ratio

[Dave S.]

Hi all. I have a question about a future problem I see with DTI ratio. As one's portfolio grows so does income obviously which is a great thing. Just wondering how people work around how banks look at rental income taking a 75% haircut. For example, if you have $200,000 a year in gross rents and a bank only allows 75% of that then you are penalized on $50,000 a year. Depending on one's other sources of income that can be a substantial hurdle. If anyone has thoughts on a different solution aside from earning another $50,000 a year in income to continue to purchase rental properties and keeping that ratio in line I would love to hear them! Thanks in advance. Dave