If rent is $1500 and the monthly fee is 8%, that equals $120/month income.

PPI, the Fed’s preferred measure of inflation, popped up last month, and PCE, CPI and PPI have been resilient to up in the face of the fastest interest rate increases in history and Quantitative Tightening, where the Fed stops buying corporate and government debt to reduce liquidity in the economy and slow financial markets.

I am looking to begin investing in real estate and trying to create some form of passive income for my family.

AI can play a role in lead generatio and market analysis, but in the end you want an experienced human to be there on your side when stuff hits the fan. it would happen gradually , similar like travel agent, job agent, marketing agent , stock brokerage agent that the numbers are slowly reducing little by litle.we are moving to society where there would be trust more into machine than human, that's where the concept is moving on slowly and that's the very basic concept of AI. new generation want something that's more emotion-less, bias-less and much less costlier when possible.

Do I have to claim the down payment as income since it was used to pay back a loan?

From most of the deals I have seen, a lot of people in Oregon are BRRRRing and can buy deals undervalued and rent them out with solid rental income. 

I have a prospective tenant that filled out an application.However I need some advice on qualifying this individual.The current rent is 3600The applicant is a family The Spouse doesnt work The main applicant gross W2 income is around $10000 monthThe monthly net income is $5700No car loan's No credit cards balancesThey pay $800 month on a personal loan.Since a rent check is written after net income is received.

What’s the typical income in the area?

The other considerations noted by other posters are valid, but when you weigh them against the high risk of extended vacancy, ending at the beginning of winter is to be avoided at all costs.  2 months of added vacancy is a 16.6% loss to annual income. 

Let's chat about what is your net income?