Can the property cover the debt?
Calculate the Debt Service Coverage Ratio — the metric every lender checks first to determine whether your property's income can reliably service the loan.
Why do real estate investors prioritize the Debt Service Coverage Ratio (DSCR)?
Because it is the most reliable metric to confirm a property’s financial strength and ensure it will generate steady, profitable cash flow.
Think of the DSCR as a health check for an investment. It proves that the property produces more than enough rental income to comfortably cover its own mortgage payments, protecting your returns.
Calculator · DSCR Underwriting
Debt service coverage
Combined NOI + debt analysis engine for lender-grade underwriting and financing health evaluation.
Property Type
Potential Rent Income
$
Vacancy & Credit Loss
%
%
Other Income
$
$
$
$
$
$
$
Operating Expenses
$
$
$
$
$
$
$
$
Loan Inputs
$
$
%
Years
Loan Amount$0
Monthly Interest Rate0.0000%
Total Months0
Periodic Loan Payment$0
Annual Debt Service$0
Net Operating Income$0
Gross Operating Income$0
DSCR Health Reference
< 1.00×Deficit — income does not cover debt
1.00–1.24×Marginal — barely breaking even
> 1.24×Strong Coverage — meets lender requirements
Results · Live
DSCR Analysis
Coverage ratio and financing health dashboard.
Awaiting your figures
Enter NOI and debt assumptions, then hit Calculate.
Debt Service Coverage Ratio (DSCR)
0.00×
ResidentialHealth
Lender DSCR Gauge · Scale 0 – 2.5×
Deficit (< 1.0×)MarginalStrong (≥ 1.25×)
—
Net Operating Income
$0
Periodic Loan Payment
$0
Annual Debt Service
$0
DSCR0.00×
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
Annual Debt Service$0
Periodic Loan Payment$0 / mo
Loan Amount$0
Debt Service Coverage Ratio0.00×
—
Debt Service Coverage Ratio (DSCR)
Why do real estate investors prioritize the Debt Service Coverage Ratio (DSCR)?
Because it is the most reliable metric to confirm a property’s financial strength and ensure it will generate steady, profitable cash flow.
Think of the DSCR as a health check for an investment. It proves that the property produces more than enough rental income to comfortably cover its own mortgage payments, protecting your returns.
Formula
DSCR
DSCR = Net Operating Income (NOI) / Annual Debt Service (ADS)
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, Mgmt, Maint, Utilities, Payroll, Admin, Reserves
Step 7
Net Operating Income
$113,200
$183,200 − $70,000
Step 8
Loan Amount
$2,000,000
$2,500,000 − $500,000
Step 9
Interest Rate
6% · 0.005 monthly
6% ÷ 12 = 0.5% = 0.005
Step 10
Periodic Loan Payment
$12,886
$2,000,000 × [0.005(1.005)^300 / ((1.005)^300 − 1)]
Step 11
Annual Debt Service
$154,632
$12,886 × 12
Step 12
DSCR
0.73×
$113,200 ÷ $154,632 = Deficit
Final Result · Residential
DSCR = 0.73×
Deficit: NOI does not cover annual debt service. This financing structure would require additional capital or improved income to meet lender standards.
© Annie Scott Realty Group LLC
Estimates only · not financial advice
