The Rental Wire / Planning tools
Rental Property DSCR Calculator
Check rent against the loan payment, taxes and insurance. Then see what remains after vacancy, operating costs and replacement reserves.
How much rent does each DSCR target need?
The loan and property costs stay fixed. These are ratios to test, not published loan terms.
| Target ratio | Required rent/mo | Entered rent minus required |
|---|---|---|
| 1.00× | $1,699 | $701 |
| 1.25× | $2,124 | $276 |
| 1.50× | $2,548 | −$148 |
Which DSCR formula should you use?
Some residential investment-property lenders compare monthly rent with PITIA: principal, interest, taxes, insurance and association dues. Other analyses use net operating income divided by debt service.
Rent-based DSCR = scheduled monthly rent ÷ monthly PITIA
Operating DSCR = monthly NOI ÷ monthly loan principal and interest
Here, NOI subtracts vacancy, management, taxes, insurance, HOA fees, maintenance and other operating costs from rent. It excludes debt and major replacement reserves. Cash flow then subtracts debt payments and the reserve.
A worked example
A $200,000 loan at 7.5% over 30 years has a $1,398.43 monthly principal-and-interest payment. Taxes and insurance add $300. At $2,400 rent, rent-to-PITIA is 1.41×. A 1.25× target needs $2,123.04 rent. With the example operating expenses and $150 replacement reserve, only $49.17 a month remains.
For examples of the different definitions, see Kiavi’s residential DSCR explanation and CoreVest’s NOI-based explanation. Confirm the rent and payment basis with the lender you are considering.
Questions about DSCR
Does meeting the target mean a loan will be approved?
No. The target is your input. Lenders also assess the property, valuation, leverage, borrower and loan structure, and may use a different qualifying rent or payment. This is a coverage estimate, not an approval or loan offer.
Why does the operating DSCR look lower?
Scheduled-rent coverage does not subtract vacancy, management, repairs or replacement savings. The operating ratio includes operating expenses and compares the resulting NOI with principal and interest. Its denominator also excludes taxes, insurance and HOA because they were already deducted from NOI.
What changes with an interest-only loan?
The payment becomes loan amount × annual note rate ÷ 12. No principal is repaid in this calculation. A lender may qualify the loan using an amortizing payment instead. Check the later payment separately; this result covers only the interest-only period.
What does the payment budget mean?
It is scheduled rent ÷ your target ratio, minus monthly taxes, insurance and HOA fees. It is a principal-and-interest payment ceiling for that formula, not a maximum loan approval. If ownership costs alone exceed the budget, the tool shows that no nonnegative loan payment fits.
Why is a ratio unavailable with no debt?
A ratio with a zero denominator is undefined. If there is no loan payment, the operating DSCR is unavailable even though you can still review cash flow. Rent-to-PITIA remains calculable if taxes, insurance or HOA fees are positive.