What does the lender see?
Calculate Debt Yield — the underwriting metric that tells lenders how well a property's income supports the loan, independent of interest rate or amortization schedule.
Why do experienced investors and lenders look at the Debt Yield?
Because it measures risk in a total what-if scenario.
Think of the Debt Yield as a liquidation test. It tells you what would happen if the lender had to foreclose on the property and take it over tomorrow. By ignoring interest rates and amortization, the Debt Yield looks purely at the property’s income compared to the total loan amount.
Calculator · Debt Yield Analysis
Debt yield ratio
Combined NOI + loan structure analysis for lender-grade risk testing and financing resilience.
Property Type
Potential Rent Income
$
Vacancy & Credit Loss
%
%
Other Income
$
$
$
$
$
$
$
Operating Expenses
$
$
$
$
$
$
$
$
Loan Structure
$
The total acquisition cost or current market value of the property.$
The initial equity capital injected by the investor at closing.Loan Amount$0
Net Operating Income$0
Gross Operating Income$0
Operating Expenses$0
Debt Yield Risk Reference
< 7%High Risk — may face refinancing and lender resistance
7% – 10%Caution — debt load requires stronger reserves
≥ 10%Safe — generally attractive to commercial lenders
Results · Live
Debt Yield Analysis
Income-to-loan ratio and lender risk assessment.
Awaiting your figures
Enter NOI and financing assumptions, then hit Calculate.
Debt Yield
0.00%
ResidentialRisk
Lender Risk Gauge · Scale 0 – 15%
High Risk (< 7%)CautionSafe (≥ 10%)
—
Net Operating Income
$0
Loan Amount
$0
Debt Yield
0.00%
Debt Yield0.00%
Property TypeResidential
Residential NOI Breakdown
Potential Rent Income$0
Vacancy & Credit Loss$0
Effective Gross Income$0
Other Income$0
Gross Operating Income$0
Operating Expenses$0
Net Operating Income$0
Purchase Price$0
Downpayment$0
Loan Amount$0
Debt Yield0.00%
—
Debt Yield
Why do experienced investors and lenders look at the Debt Yield?
Because it measures risk in a total what-if scenario.
Think of the Debt Yield as a liquidation test. It tells you what would happen if the lender had to foreclose on the property and take it over tomorrow. By ignoring interest rates and amortization, the Debt Yield looks purely at the property’s income compared to the total loan amount.
Formula
Debt Yield
Loan Amount = Purchase Price − Downpayment
Debt Yield = (Net Operating Income (NOI) / Loan Amount) × 100
Step-by-Step Example
Step 1
Potential Rent Income
$180,000
Step 2
Vacancy & Credit Loss
$10,800
$180,000 × (5% + 1%)
Step 3
Effective Gross Income
$169,200
$180,000 − $10,800
Step 4
Residential Other Income
$14,000
Parking + Storage + Laundry + Pet + Application + Late Fees
Step 5
Gross Operating Income
$183,200
$169,200 + $14,000
Step 6
Residential Operating Expenses
$70,000
Taxes + Insurance + Management + Maintenance + Utilities + Payroll + Admin + Reserves
Step 7
Net Operating Income (NOI)
$113,200
$183,200 − $70,000
Step 8
Loan Amount
$2,000,000
$2,500,000 − $500,000
Step 9
Debt Yield
($113,200 ÷ $2,000,000) × 100
5.66%
Final Result · Residential
Debt Yield = 5.66%
High Risk: this debt load is high relative to NOI and may be difficult to refinance without stronger cash flow or more equity.
© Annie Scott Realty Group LLC
Estimates only · not financial advice
