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Real Estate Glossary

Debt Service Coverage Ratio

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Written by Luis Escobar

This is a metric used to measure a property’s ability to fund all of its debt obligations. The DSCR is determined by dividing the annual (NOI) net operating income by the annual debt service expense. It is often expressed as a multiple. This is then used by banks to calculate the maximum loan amount to be offered to a borrower.

This is a metric used to measure a property’s ability to fund all of its debt obligations. The DSCR is determined by dividing the annual (NOI) net operating income by the annual debt service expense. It is often expressed as a multiple. This is then used by banks to calculate the maximum loan amount to be offered to a borrower.

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Luis Escobar

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