Debt Service Coverage Ratio (DSCR) 2022-06-22 08:00:00

Debt Service Coverage Ratio (DSCR)

In the context of commercial real estate, a measure of the cash flow available to pay current debt obligations. It is calculated as the annual net operating income (NOI) from a property divided by annual cost of total debt service.

For example, if a property generates an NOI of $120,000 and annual debt service payments are $100,000, the DSCR would be 1.20 ($120,000 / $100,000). A DSCR below 1.0 means that there are insufficient funds generated by the property to cover its debt obligations.


The Investor's Guidebook To Net Lease

Download The Guide To Net Lease Properties

Learn More About Net Lease Investments.

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.