DSCR Calculator
Calculate Debt Service Coverage Ratio to assess ability to pay debt obligations
Calculate DSCR
Enable to calculate Net Operating Income from gross income, expenses, and vacancy rates
Monthly income after operating expenses
Total monthly debt payments (principal + interest)
DSCR Results
Formula used: DSCR = Net Operating Income ÷ Total Debt Service
Calculation: $5000.00 ÷ $2750.00 = 1.82x
Rating: Strong cash flow coverage
Loan Status: Likely Approved
DSCR Analysis
Example Calculation
Rental Property Analysis
Net Operating Income: $5,000/month
Total Debt Service: $2,750/month
Breakdown: Mortgage ($2,500) + Maintenance ($200) + Insurance ($50)
DSCR Calculation
DSCR = $5,000 ÷ $2,750 = 1.82x
Rating: Excellent (1.82x coverage)
Loan Status: Likely Approved
Excess Cash Flow: $2,250/month
DSCR Benchmarks
1.5x+
Excellent Coverage
Strong cash flow position
1.25x
Minimum Standard
Typical lending requirement
<1.0x
Insufficient Coverage
Cash flow deficit
Investment Tips
Target DSCR of 1.25 or higher for loan approval
Higher DSCR provides cushion for unexpected expenses
Consider vacancy and maintenance costs in calculations
Monitor DSCR regularly as market conditions change
Understanding DSCR
What is DSCR?
Debt Service Coverage Ratio (DSCR) measures a property's ability to generate enough income to cover its debt payments. It's a key metric used by commercial lenders to assess loan risk and determine borrower qualification.
Key Components
- •NOI: Net Operating Income after expenses
- •Debt Service: Principal and interest payments
- •Coverage Ratio: NOI divided by debt service
- •Cash Flow: Excess income after debt payments
Calculation Formula
DSCR = Net Operating Income ÷ Total Debt Service
Why DSCR Matters
- Loan Qualification: Determines eligibility for commercial loans
- Risk Assessment: Measures investment cash flow stability
- Investment Analysis: Evaluates property income potential
- Financial Planning: Helps optimize debt structure
- Portfolio Management: Monitors property performance
Industry Standard: Most lenders require a minimum DSCR of 1.25x for commercial real estate loans