What is debt service coverage ratio (DSCR) in real estate?

Understanding the Long-Term Debt-to-Total-Assets Ratio Formula

DSCR: Debt Service Coverage Ratio

DSCR (Debt Service Coverage Ratio) - What Is It, Formula

Debt Coverage Ratio - Meaning, Formula, How to Calculate?

DSCR - Formula, Ideal Ratio, Meaning - Fortrisk Consulting

Debt-Service Coverage Ratio (DSCR): How to Use and Calculate It

I get asked all the time — how do you calculate DSCR? It’s actually a really simple equation. You take the income generated by the property (from the lease or the 1007 form), and you divide it by the holding costs — that’s your principal, interest, taxes, insurance, and any HOA dues. That gives you your DSCR ratio. Ideally, you’re looking for a ratio of 1.0 or higher, but we can work with ratios as low as 0.75, or even no ratio at all depending on the loan-to-value. Got questions? Reach out — ha