Didn't you have another thread about this same thing?
This is the answer:
Any rental that cash flows even a tiny bit should (in my experience) *improve* your DTI no matter what the mortgage balance is.
If and only if the debt of the property itself, by itself (and only counting the 75% the bank does) is under their guidelines. Then it will "drag" your DTI towards that number (like adding an extra number in an average, it weights it towards that number).
When I add rental house #1, the bank only count 75% of the income because of vacancy and repairs.
So even if the bank only counts 75% of the rental income (due to vacancies, repairs, taxes and insurance, etc.), your DTI should hopefully get better, or at least stabilize low, below their threshold. because your debt added (the numerator in DTI) is smaller than the income added (in the denominator).
If this is not the case, the mortgage is probably too close to the debt (for example if the mortgage is half that 75% income, it'll "weight" your DTI towards 50%). The smaller proportion the debt is, the more it helps your DTI.
The bank doesn't care about your equity across other properties, because they don't want to have to sue you personally for debt on this property. They want to see: 1) Equity on this property (i.e. a down payment) and 2) Income to show you can service the new mortgage. Equity in another property can't do that.
The rent itself though will help service it, and that's what should improve your DTI.
Rental #1
Rent = $2000/month
Mortgage, Taxes & Insurance = $953
Owe= $115,000
Worth = $320,000
Rental #2
Rent = $1700/month
Mortgage, Taxes & Insurance = $670
Owe= $76,000
Worth = $225,000
Debt to Income for myself only
My monthly income is $5416. Our apartment is 1,100/month and I have $240/month in student loans. Without any rental real estate my debt to income ratio is $1340/$5416 = 24.74%
When I add rental house #1, the bank only count 75% of the income because of vacancy and repairs. My new debt to income ratio is $2293/$6916 = 33.15%
When I add rental house #2, my new debt to income ratio is $2963/$8191 = 36.17%
So let's look at this math.
Rental 1, on its own (and only taking 75% of the income), is a DTI of 953/1750 = 54.4%.
Rental 2, same assumptions, is a DTI of 670/1275 = 52.5%
So adding those rentals in of course ups your DTI. If you added in a bunch like that, your DTI would trend towards that 53%ish number. (Think of an average of, say 10 and 20. It's 15. Now imagine I add in 18, 18, 18, 18, 18... that average will trend towards 18.)
If you're now adding in a similar 3rd property, again it will up that average.
If, on the other hand, the DTIs of an individual property were around 20%, they'd be bringing down your personal DTI.
Does that make sense now why your DTI is going up with each property you buy?
To propose a potential solution: If you have so much equity, you may want to consider refinancing one to pay off another. That could help improve your DTI, given you likely have trapped equity in both.