@Jon Holdman thanks for the explanation, makes a lot of sense.

@Jon Holdman had an explanation here http://www.biggerpockets.com/forums/49/topics/77330-dti where he saidDTI = (total debt payments except rentals) / (W2 income + net rental income)

If your lender does not understand it - you probably need a more experienced lender.That said, I have (reluctantly) created quite a few ridiculous balance sheets and explanations on letterhead to placate certain lenders on behalf of my clients.

Last time there was a recent large deposit which they required a letter of explanation for, they wanted me to prove that I didn't borrow that money from someone else to pay for my downpayment.

Very clear Ann, and appreciate your explanation - helpful for a new investor. 

But for the sake of this explanation, let's assume this is now your primary residence.

I have more work to do...Maybe a bit more explanation would be helpful here.

We had to write an explanation note as to why we were moving to the new property. 

@Vlad KuzinVlad, thank you for the explanation.

I only do month to month leases so keep him on month to month so if he chooses to leave you can start fresh.You don't owe him any explanation of why rent is increasing, nor does he why other owner kept it so low..