You can now be approved for up to 95% of the value of the rental property and up to 80% of the income. If you have equity in your home, which many do these days, diversifying your real estate holdings could be something to consider. For example, if you purchase a rental for $500,000 at a rate of 5.99% (5 year fixed) your montly payments would be $2757 (this includes the insurance premium) - based on a 40 year amortization. If the property had a suite and rented out for a total of $2500 a month - you would be carrying approx $300 per month plus taxes. If your home is paid off or have low mortgage payments, this would be a small carrying cost relativley speaking.
The other variable to consider is any major renovations or improvment costs associated with the property. Be sure to take all costs into consideration when looking at purchasing an investment property.
