For income assessments, what portion of rental property income can generally be used?

When assessing income from rental properties for mortgage applications, lenders typically accept a portion of the rental income as part of the borrower's qualifying income. The range of 50-80% is commonly utilized because it accounts for potential vacancies, maintenance costs, and other expenses that might reduce the actual profit from the rental property.

Using a conservative estimate helps lenders ensure that borrowers can manage their mortgage payments while accounting for possible variations in rental income due to tenant turnover or market fluctuations. This approach provides a more stable basis for evaluating a borrower's financial capability, thereby minimizing the risk for lenders.

While some may consider allowing a different percentage, relying on 50-80% balances optimism with caution in income assessment practices. This is crucial, particularly in the context of mortgage underwriting, as it seeks to verify that borrowers will not only meet their obligations under normal circumstances but also have a buffer against unexpected situations that could affect their rental income.