DSCR Calculator
DSCR estimates how much net operating income covers debt service. A higher DSCR can suggest more income cushion under the inputs, but lending standards vary and DSCR alone does not decide financing review outcomes.
Estimates are based on your inputs and assumptions. DealSharp does not provide financial, investment, legal, tax, or lending advice.
Run the number, then pressure-test the assumptions.
DSCR estimates how much net operating income covers debt service. A higher DSCR can suggest more income cushion under the inputs, but lending standards vary and DSCR alone does not decide financing review outcomes.
Use this page to understand the metric directionally, then compare it against financing, reserves, repair risk, cash flow, and your own constraints.
Use this working calculator as a starting point, then run the full deal in DealSharp when you need more inputs, side-by-side scenarios, and risk context.
DSCR = annual NOI / annual debt service
If annual NOI is $30,000 and annual debt service is $24,000, DSCR is 1.25.
Assumptions
Debt service coverage ratio
Estimated outputs
Scenario snapshot
Scenario estimate based on the inputs shown here. Use the full DealSharp app to compare financing, repairs, vacancy, cash flow, and risk assumptions before deciding.
How to read this number
The useful move is not treating one number as a final answer. Use it to decide which assumptions deserve more review, then compare the result against cash flow, financing, reserves, repair risk, and your own constraints.
Inputs required
- Metric inputs shown in the formula or calculator.
- Income, expense, debt, value, and cash assumptions where relevant.
- Investor-provided numbers that should be checked against source documents.
Outputs explained
- Scenario estimate based on the inputs.
- Plain-English context for comparing the metric.
- Limitations and assumptions to review before relying on the result.
Assumptions to review
- Inputs are estimates supplied by the user.
- Market rent, lender terms, taxes, insurance, repairs, and legal details can change the result.
- DealSharp does not provide financial, investment, legal, lending, tax, or accounting advice.
What this tells you
- A DSCR above 1.00 means modeled NOI is higher than debt service.
- A DSCR below 1.00 means modeled NOI is not enough to cover debt service.
- Many investors use DSCR to stress-test rate, rent, and vacancy assumptions.
What this does not tell you
- DSCR does not confirm financing review, property value, appraisal, credit, reserves, or underwriting overlays.
- It does not include capital expenditures unless they are included in the NOI assumptions.
Common mistakes
- Using gross rent instead of NOI.
- Using monthly debt service against annual NOI without converting periods.
- Assuming one DSCR threshold applies to every lender and asset type.
FAQ
What does DSCR below 1.00 mean?
It means the modeled NOI is lower than the modeled debt service for the same period.
Does DSCR include taxes and insurance?
Property taxes and insurance are usually operating expenses that reduce NOI. Loan escrow details can vary by lender.
Run the full deal before deciding
This page helps with one metric or workflow. DealSharp is built for full real estate deal analysis: assumptions, financing, cash flow, repair scenarios, DSCR, cap rate, and risk flags based on your inputs.
Open DealSharpDisclaimer
DealSharp provides calculation and scenario-modeling tools for informational purposes only. Outputs are estimates based on your inputs and assumptions. DealSharp does not provide financial, investment, legal, lending, tax, or accounting advice. Verify important decisions with qualified professionals.