DSCR & Investing
Debt Service Coverage Ratio
The ratio of a property's gross rental income to its total mortgage payment (PITIA). A DSCR of 1.0 means the rental income exactly covers the payment. Most DSCR lenders require a minimum ratio of 1.0, with 1.25 considered ideal.
Example
A property rents for $2,500/month and the PITIA is $2,000/month. DSCR = 2,500 ÷ 2,000 = 1.25.
Related terms
- PITIA
- DSCR Loan
- Investment Property Loan
- Cash Flow