CalculateRealEstateROI

ROI Metrics

Debt Service Coverage Ratio (DSCR)

NOI divided by annual debt service, measuring a property's ability to cover its loan.

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

Plain-English explanation

How much NOI cushion exists over the mortgage payment. Lenders want >1.20.

Formula

DSCR = NOI / Annual Debt Service

Examples

  • $14k NOI ÷ $11k debt service = 1.27 DSCR.
  • DSCR lenders typically require 1.20-1.25.

Common mistakes

  • Computing on pre-vacancy gross income instead of NOI.

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