DSCR rental coverage
Buying a rental? Check whether the property's rent covers its full payment — the same coverage math a DSCR lender runs.
Buying a rental? Check whether the property's rent covers its full payment — the same coverage math a DSCR lender runs.
For a residential rental, DSCR commonly compares qualifying monthly rent with principal, interest, taxes, insurance and association dues. $3,000 rent divided by a $2,500 full payment gives a 1.20 ratio. A ratio of 1.00 means rent only covers that payment.
This is not your net profit: repairs, vacancy, management and other operating expenses still matter. Lenders differ on eligible rent, minimum coverage, reserves, credit and down payment. Commercial apartment underwriting uses net operating income; do not substitute this residential ratio for a 5+ unit analysis.