Use this calculator to evaluate the viability of an rental property from a financing perspective.
The math: (Net Operating Income / Debt Service) = DSCR
Debt Service Coverage Ratio (DSCR) calculations are commonly used by lenders to determine your ability to make loan payments based on the performance of the rental property used as loan collateral. It measures the sufficiency of rent collected against expenses and debt payment obligation. Lenders may include different expense categories in their calculations, but this calculator shows common criteria.
A DSCR above 1.25 is generally considered optimal, but lenders will have their own thresholds of acceptability.
Filed under Deal Analysis, Operations
Keep reading
Have a deal that needs funding?
Brokers send a deal to Think, get an indicative term sheet from the borrower’s numbers, and move to a lender when the packet is complete.
See Think Premier LOS