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How to Calculate DSCR Ratio: Step-by-Step Guide for Accurate Real Estate Loan Approval

Last Updated: June 25, 2025

What Is the DSCR Ratio?

The DSCR ratio measures your property's ability to cover debt payments using rental income. Lenders and investors review the DSCR ratio before approving any real estate loans. Using the DSCR ratio highlights the connection between rental revenue and total loan obligations.

Two formulas often arise when discussing the DSCR ratio:

Primary Formula Used:

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