Can property lease payments be added back to cash flow in a commercial mortgage?

Posted on Feb 12, 2013 in Stated Income Loans

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0804 | French Apartment Building | 2009 | East Side

Image by Facility Records | MSU Physical Plant
0804 | French Apartment Creating | 2009 | East Side

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Question by BuzzBee: Can property lease payments be added back to cash flow in a commercial mortgage?
If an established business exists on a leased property (and will be moving into the new property after closing), and can the lease payments be added back to the cash flow when determining the approval amount for loan?

I will not renew my lease if I can find a nice piece of commercial property.
I dont understand why not. To me it is like telling a renter interested in purchasing a home that their qualifying amount is based on their income AFTER they pay their rent. It doesnt make sense. The only difference is that the business owner can take that expense off their taxes.

Best answer:

Answer by Your #1 fan
No. Anything a lesse pays goes to the owner. You receive no benefit from it as the tenant. Maybe less tax as it is a business expense.

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4avg.rating 24 votes.

One Comment

  1. You need to state your question more clearly. Are you asking if the rent you currently pay would be considered part of the income of the buisiness? The answer would be yes. You have asked the question in a way that would be hard to understand.