Real Estate & Investing
DSCR (Debt Service Coverage Ratio)
Definition
A ratio that measures whether a property generates enough income to cover its debt obligations. Calculated as Net Operating Income divided by Total Debt Service (annual mortgage payments). A DSCR of 1.25 means the property generates 25% more income than needed to pay the mortgage. Most lenders require a minimum DSCR of 1.2 to 1.25 for investment property loans. A DSCR below 1.0 means the property does not generate enough income to cover the mortgage, requiring the investor to cover the shortfall from other sources.
Related Templates
These SheetCraft templates use or relate to DSCR (Debt Service Coverage Ratio):
- Rental Property Analyzer, Evaluate rental deals with cap rate, cash-on-cash return, and 10-year cash flow projections, plus a multi-property portfolio tracker.