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How Do You Calculate Debt Service Coverage Ratio?
Last Updated: June 28, 2025
What Is Debt Service Coverage Ratio (DSCR)?
Debt service coverage ratio (DSCR) measures your ability to cover debt obligations using your property’s gross rental income. Lenders and investors use debt service coverage ratio (DSCR) to determine your property’s cash flow strength when evaluating loan requests or investment opportunities.
Calculating debt service coverage ratio (DSCR) requires understanding the formula used for evaluating rental property performance. For your calculation, apply the formula:
