Lease

Leases spell out how long a tenant may live in a home, how much they pay and what each side is responsible for. A signed lease finishes the rent step of BRRRR and often becomes part of the refinance file, where the lender uses it to support the property's income.

Investor lenders often ask for a signed lease before funding the refinance. Some check it against the appraiser's market rent and underwrite whichever number is smaller. A lease well above market rent may not get full credit.

Terms that protect the investment include the rent and due date, security deposit, who pays which utilities, maintenance duties, and rules on pets and subletting. A 12-month lease signed shortly before the refinance also gives the new lender a year of expected income to underwrite.

Further reading: Lease on Wikipedia.