DSCR

Also called: Debt Service Coverage Ratio

The Debt Service Coverage Ratio (DSCR) measures a property's ability to cover its debt payments from its operating income. Lenders use it to size loans and assess risk; a DSCR below 1.0 means the property doesn't generate enough income to cover its debt service.

Example

$650,000 in NOI against $518,936 in annual debt service gives a DSCR of 1.25x.

Formula

NOI ÷ Annual Debt Service = DSCR

Excel Formula:

• B8 = NOI
• B12 = Annual Debt Service