CalculateRealEstateROI

Financing

What is DSCR and what's a good ratio?

Debt Service Coverage Ratio = NOI / annual debt service. 1.25+ is the standard minimum.

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

Direct answer

Debt Service Coverage Ratio = NOI / annual debt service. 1.25+ is the standard minimum.

Expanded explanation

DSCR measures how comfortably property cash flow covers the mortgage. 1.0 = breakeven, 1.25 = 25% cushion, 1.5+ = strong. Most DSCR lenders require 1.20–1.25 minimum; some allow 1.0 with higher rate.

Examples

  • $30k NOI / $24k debt service = 1.25 DSCR.

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