Build effective income
Monthly rent and other income are annualized to gross scheduled income. The entered vacancy rate reduces that total to effective gross income.
Debt coverage
DSCR Calculator
Compare projected net operating income with the annual principal-and-interest payments produced by a fixed-rate loan scenario.
Decision question
Can projected NOI cover the modeled annual debt service?
This calculator provides estimates for planning and comparison, not financial, tax, investment, or lending advice.
Coverage memo
Follow property income through annual debt coverage
DSCR separates property operations from financing. Build NOI first, calculate the loan payment separately, then compare the two annual amounts.
Primary formula
DSCR = Net Operating Income ÷ Annual Debt Service
Annual debt service is the modeled monthly principal-and-interest payment × 12. It is not deducted when calculating NOI.
Separate operations from financing
Taxes, insurance, HOA fees, utilities, management, maintenance, and other recurring costs reduce NOI. The mortgage payment is calculated afterward as debt service.
Read the result in context
A ratio above 1.00x means modeled NOI exceeds modeled debt service; below 1.00x means it does not. Lender requirements still depend on the loan program, property, market, and underwriting rules.
Questions
About the DSCR Calculator
Debt service coverage ratio compares projected net operating income with modeled annual debt service. It shows how much property-level NOI is available relative to the principal-and-interest payments in this scenario.
It annualizes rental and other income, subtracts vacancy loss, then subtracts property taxes, insurance, HOA fees, utilities, other expenses, property management, and maintenance. Mortgage payments are excluded from NOI.
For this calculator, 1.25x or more is labeled strong coverage, 1.00x through 1.24x is labeled tight coverage, and below 1.00x is labeled insufficient coverage. These labels are scenario signposts, not lender approval standards; requirements and underwriting adjustments vary.
No. In this model, annual debt service is the calculated monthly principal-and-interest payment multiplied by 12. Property taxes and insurance are treated as operating expenses that reduce NOI.
DSCR is shown as unavailable when modeled annual debt service is zero, because the ratio cannot divide NOI by zero. The NOI and operating-expense results remain available for review.