I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Factoring market conditions at the time of refinance, I negotiated a lower rate and conceded a lower term anticipating rates to normalize in the 4%-5% range by 2026.

Just factor the cost into the rent.

Look at factors like proximity to jobs, schools, transportation hubs, etc.

@Collin Hays My favorite that came in at 6am one morning when the nights low temperature was 58 degrees and the high temperature was to be around 75 was the following.

Is it fairly priced for the size, location, quality, and other factors?

The major factor to standing out in any market is design.

It also matters where the home is located, and what the weather, type of tenants it attracts/has been attracting, etc. other factors are.

That should really be the deciding factor...is it necessary and a large enough project to include the permit process?

Your accountant should be able to factor that into your total cost.