The Debt Service Coverage Ratio measures whether a property's income can cover its loan payments. It's Net Operating Income ÷ Annual Debt Service. Lenders use DSCR to qualify investor loans — most require 1.15–1.25 minimum.
DSCR
1.18x
What does this mean?
A DSCR of 1.15–1.25 meets the minimum threshold for most DSCR loan programs. The property covers its debt with a modest buffer, but there isn't much room for error.
Why DSCR matters
DSCR loans let investors qualify based on the property's income — not personal W-2s or tax returns. The ratio tells lenders whether the rental income can cover the mortgage. A higher DSCR means lower risk and often better rates.
Keep running the numbers
DSCR tells you if the property pays for itself. Now look at the full picture.
Measure the annual return on your actual cash invested, factoring in financing, expenses, and rental income.
Calculate your monthly mortgage payment, total interest, and see a full cost breakdown.
Calculate Net Operating Income — the foundation of commercial real estate valuation.
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