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How to Calculate Debt Service Ratio: Step-by-Step Guide for Real Estate Investors
Last Updated: October 9, 2025
What Is Debt Service Ratio?
The debt service ratio measures how much of your rental income covers your property’s recurring debt obligations. Real estate investors and lenders use this ratio to evaluate whether the rent paid by occupants provides enough cash flow to cover monthly payments and other mandatory property expenses.
When calculating the debt service ratio for mortgages or income properties, use the primary formula:
