DSCR Calculator

DSCR is evaluated from Gross Annual Rental Income, Vacancy Rate and Annual Operating Expenses. The calculation reports Effective Gross Income, Net Operating Income and DSCR Ratio.

Results

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About the DSCR Calculator

DSCR is treated here as a quantitative relation between Gross Annual Rental Income, Vacancy Rate, Annual Operating Expenses and Annual Mortgage / Debt Service and Effective Gross Income, Net Operating Income, DSCR Ratio and Lender Qualification.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Effective Gross Income = Gross Rental Income x (1 - Vacancy Rate)
Net Operating Income = Effective Gross Income - Operating Expenses
(Note: Operating Expenses include property tax, insurance, maintenance, management - but NOT the mortgage payment)
DSCR = NOI / Annual Debt Service

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Effective Gross Income = Gross Rental Income x (1 - Vacancy Rate)
Net Operating Income = Effective Gross Income - Operating Expenses
(Note: Operating Expenses include property tax, insurance, maintenance, management - but NOT the mortgage payment)
DSCR = NOI / Annual Debt Service

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Strong Single-Family Rental

Inputs

gross_rental_income: 36000 vacancy_rate: 8 operating_expenses: 8400 annual_debt_service: 21600
Effective Gross Income: $33,120. Net Operating Income: $24,720. DSCR Ratio: 1.14 ratio. Lender Qualification: Borderline - Below most lender minimums (1.25)

With Gross Annual Rental Income = 36,000, Vacancy Rate = 8, Annual Operating Expenses = 8,400 and Annual Mortgage / Debt Service = 21,600 as the stated inputs, the result is Effective Gross Income = $33,120, Net Operating Income = $24,720 and DSCR Ratio = 1.14 ratio. Each value corresponds to the declared output fields.

Example 2: Qualifying DSCR — Multifamily

Inputs

gross_rental_income: 72000 vacancy_rate: 7 operating_expenses: 22000 annual_debt_service: 38400
Effective Gross Income: $66,960. Net Operating Income: $44,960. DSCR Ratio: 1.17 ratio. Lender Qualification: Borderline - Below most lender minimums (1.25)

With Gross Annual Rental Income = 72,000, Vacancy Rate = 7, Annual Operating Expenses = 22,000 and Annual Mortgage / Debt Service = 38,400 as the stated inputs, the result is Effective Gross Income = $66,960, Net Operating Income = $44,960 and DSCR Ratio = 1.17 ratio. Each value corresponds to the declared output fields.

Example 3: Excellent DSCR — Value-Add Property

Inputs

gross_rental_income: 96000 vacancy_rate: 5 operating_expenses: 28000 annual_debt_service: 42000
Effective Gross Income: $91,200. Net Operating Income: $63,200. DSCR Ratio: 1.5 ratio. Lender Qualification: Strong - Preferred by commercial lenders (>= 1.5)

With Gross Annual Rental Income = 96,000, Vacancy Rate = 5, Annual Operating Expenses = 28,000 and Annual Mortgage / Debt Service = 42,000 as the stated inputs, the result is Effective Gross Income = $91,200, Net Operating Income = $63,200 and DSCR Ratio = 1.5 ratio. Each value corresponds to the declared output fields.

Example 4: Commercial Property — Office

Inputs

gross_rental_income: 180000 vacancy_rate: 15 operating_expenses: 65000 annual_debt_service: 78000
Effective Gross Income: $153,000. Net Operating Income: $88,000. DSCR Ratio: 1.13 ratio. Lender Qualification: Borderline - Below most lender minimums (1.25)

With Gross Annual Rental Income = 180,000, Vacancy Rate = 15, Annual Operating Expenses = 65,000 and Annual Mortgage / Debt Service = 78,000 as the stated inputs, the result is Effective Gross Income = $153,000, Net Operating Income = $88,000 and DSCR Ratio = 1.13 ratio. Each value corresponds to the declared output fields.

Common Use Cases

  • Qualify for a DSCR investment property loan
  • Evaluate whether a rental property cash flows sufficiently for financing
  • Assess commercial real estate deal viability