This form summarizes the investment property’s annual income vs. expenses. The appraiser lists the going neighborhood market rents (from the 1007 Rental Survey) and then estimates all expenses throughout one year on that property (repair costs, utilities, upkeep costs, etc). Then, he calculates the difference between the two figures to determine the property’s annual income. For example, a rent of $1500 a month, or $18,000 a year, minus $5,000 in expenses throughout the year, averages a positive income of $13,000 for the year. Again, the lender adds this income on to the borrower’s other income sources to determine if he qualifies for the loan or not.
(Anne Walsh - LendersAid)