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Real Estate Tool

DSCR Calculator

Estimate the debt service coverage ratio for a rental property or investment real estate deal. DSCR compares property income to the loan payments required to own it.

Enter the property assumptions

Optional. Used only in the result summary and share text.
Expected gross rent before expenses.
Laundry, parking, storage, pet rent, etc.
Use annual amount.
Use annual premium.
Routine repairs and maintenance reserve.
Enter zero if self-managed.
Percent of gross income reserved for vacancy.
HOA, utilities paid by owner, licenses, etc.
Principal and interest payment only, unless your lender defines otherwise.
Many lenders use a minimum target such as 1.20 or 1.25.

What is DSCR?

Debt service coverage ratio, or DSCR, measures whether a property produces enough income to cover its debt payments. It is commonly used by lenders and real estate investors to evaluate rental property financing.

DSCR = Net Operating Income ÷ Annual Debt Service

A DSCR of 1.00 means the property income equals the annual loan payments. A DSCR above 1.00 means the property produces more income than the annual debt service. A DSCR below 1.00 means the property does not produce enough income to cover the loan payments based on the assumptions entered.

Important note

Lenders may calculate income, expenses, reserves, and debt service differently. This tool is for quick planning and deal screening, not loan approval.

How to use this DSCR calculator

Enter the expected monthly rent, other income, annual operating expenses, vacancy allowance, and monthly loan payment. The calculator estimates annual gross income, subtracts vacancy and operating expenses, then divides net operating income by annual debt service.

What is a good DSCR?

Many real estate investors and lenders prefer to see DSCR above 1.20 or 1.25, though requirements vary by lender, property type, borrower profile, loan structure, and market conditions. A higher DSCR generally means more income cushion. A lower DSCR may indicate greater risk or a need for a lower loan amount, higher rent, lower expenses, or a lower purchase price.

Related tools

Cap Rate CalculatorEstimate property yield before debt. Coming soon.
Rental Cash Flow CalculatorEstimate monthly cash flow after expenses and debt. Coming soon.
Cash-on-Cash Return CalculatorCompare return against cash invested. Coming soon.
Disclaimer: This calculator is for educational and planning purposes only. It does not provide financial, legal, tax, investment, lending, or real estate advice. Results are estimates based on the information entered and should be verified before making financial decisions.