CalculateRealEstateROI

Risk Management

How should I stress-test a deal?

Model rent -10%, vacancy +5%, expenses +20%, rate +200bps simultaneously. If DSCR stays above 1.0, deal survives.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Model rent -10%, vacancy +5%, expenses +20%, rate +200bps simultaneously. If DSCR stays above 1.0, deal survives.

Expanded explanation

Single-variable sensitivity isn't enough — recessions hit multiple variables at once. Conservative deals survive combined stress; marginal deals fail.

Examples

  • 1.45 DSCR base → 1.05 under combined stress = pass.

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