I work with a bunch of different lenders, so I try to give advice that has the broadest possible application, since we don't always know who the lender will be on the N+1 deal two years from now.So my suggestion to you, to have your cake and eat it too, for that SFR that you want to rent by the room to maximize rent: have one lease, one tenant.... and that one tenant is allowed to sublet.

Hi AJ, Great info- Our group has been receiving more applications from investors for 5-8 unit properties. 

Tell them you intend to run a credit and background check, and tell them what it costs per adult applicant.

@Marty Rogachefsky this does NOT sound like a Class B area, more like Class C at best.Also, from your description, sounds like a Class D property.Your PMC should be able to send you the S8 Property Standards for your review.You could also "accept" a S8 applicant and schedule the S8 inspection, just to get the list of repairs.In our opinion, if an owner won't keep their property up to S8 standards, which are not that demanding, then they are a slumlord.

For a $300,000 property, this could be $6,000 to $15,000.Mortgage on Rental Property:Loan Amount: $240,000 (assuming 80% financed at 4% interest over 30 years).Monthly Payment: Approximately $1,145.Other Expenses:Property Taxes: Estimated at 1.5% of property value annually ($4,500).Insurance: Estimated at $1,500 annually.Maintenance: Estimated at 1% of property value annually ($3,000).Property Management Fees: Assuming 10% of monthly rental income ($2,400 annually if rent is $2,000 per month).Vacancy and Turnover Costs: 5% of annual rental income ($1,200).Total Initial Investment and Annual Operating ExpensesInitial Investment:Total Borrowed from Equity: $150,000Down Payment for Rental Property: $60,000Closing Costs for Rental Property: $10,500 (average)Total Initial Cash Outlay: $70,500 (initial investment from equity) + $10,500 (closing costs)Annual Operating Expenses:Property Taxes: $4,500Insurance: $1,500Maintenance: $3,000Property Management Fees: $2,400Vacancy and Turnover Costs: $1,200Total Operating Expenses: $12,600 annuallyExpected ReturnRental Income:Assuming $2,000 per month, annual rental income = $24,000.Net Operating Income (NOI):Annual Rental Income: $24,000Minus Annual Operating Expenses: $12,600NOI: $11,400Debt Service:Mortgage Payment on Rental Property: $1,145 monthly, $13,740 annually.Total Debt Service: $13,740 (rental property) + $8,592 (equity loan) = $22,332 annually.Net Cash Flow:NOI: $11,400Minus Debt Service: $22,332Net Cash Flow: -$10,932 annually (negative cash flow initially due to high debt service).Cash-on-Cash ReturnInitial Cash Investment: $70,500Net Cash Flow (first year): -$10,932Cash-on-Cash Return: Not applicable initially due to negative cash flow.Long-Term Appreciation and AdjustmentsProperty Appreciation:Assuming a 3% annual appreciation, the property value could increase by $9,000 annually.Rent Increases:Assuming a 2% annual rent increase, rental income will rise, improving cash flow.

Quote from @Johnnie Fair: I wouldn't accept her application.When checking landlord references, many applicants will give you the number of a friend or family member that pretends to be the landlord.

Hi BP community,There was a recent ordinance passed in the state of Missouri (specifically the actual city of Kansas City) pertaining to whether or not landlord's can review and deny tenant applications based on sources of income.

I've enclosed a link of Hawaii's Floodway Permit Application which I assume will be similar to other states.   

Zillow applications have both.

If you were a bank/lender and an investor wanted to borrow funds on a property with several moving parts (actions towards repayment) what would you want to see from the applicant?