Real estate & rental
Real Estate DSCR Calculator
Debt service coverage ratio, the number a lender uses to decide whether the rent covers the loan.
Result
An arithmetic tool, not investment advice. Property returns depend on the local market, the condition of the building, financing terms and tax position, none of which a calculator can see. Verify the income and expense figures against actual statements rather than a seller's projection. Lenders calculate NOI to their own standards, which are usually stricter than an owner's: they often impose a minimum vacancy factor, a management fee even for self-managed property, and a replacement reserve. Expect the lender's NOI to be lower than yours.
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About this calculator
What DSCR do lenders want?
Commonly 1.20 to 1.30 for residential investment property, higher for commercial or for riskier asset types. Below 1.0 the property does not cover its own loan.
Why is the lender's NOI lower than mine?
Because they apply their own assumptions: a minimum vacancy rate, a management fee whether or not you pay one, and reserves for capital items. Those adjustments routinely knock several thousand off.
The formula
DSCR = net operating income / annual debt service
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