It’s easier the second time around. Hey, so is the third and fourth. What are we talking about? Financing your rental property with a conventional mortgage. Yes, anyone can still get long term financing with competitive rates for rental homes as long as the borrower has good credit and a 20 percent downgetting approved for a mortgage payment. Rates are still very low for real estate investors which should keep cash flow more positive as each year passes.

But the experience the second time around isn’t just about getting to know the paperwork—it’s how banks approve your initial application.

Even if you’re applied for a mortgage or two over the past few years each time you’re probably still surprised at the amount of paperwork involved and you can expect more, not less paperwork in the future. It may not be surprising but you can expect to sign more than one document that says you received and signed other documents and you understood them. Maybe you did and maybe you didn’t but there is such a document.

Yet what’s easier the second time is not the paperwork but how much easier it is to get approved. You see, first time real estate investors aren’t allowed to use the rental income from the subject property to help qualify. That’s right, even though the income is there it can’t be counted so be prepared to qualify based upon paying for two mortgages, the one for your primary residence and your rental.

However, once you can demonstrate that you can handle being a landlord and your federal tax returns shows a positive cash flow, not counting depreciation, then on your subsequent rental acquisition the lender will use the rental income and add it to your qualifying income. In essence, you’re buying an appreciating asset that costs you nothing each month while putting extra cash in your bank account. That’s why it’s not uncommon to meet real estate investors that own 20 or even 30 or more rentals. After the first one, it’s easy.