DSCR calculator
Divide net operating income by the year’s mortgage payments. This is the debt service coverage ratio on a BrickAtlas rental memo.
Calculate DSCR
Enter the rent, expenses, and loan Analyst uses. NOI is income after vacancy and operating costs, before the mortgage. Debt service is principal and interest for the year.
Purchase and loan
Income
Annual operating costs
Percent of gross rent
Debt service coverage
1.31
$14,908 NOI ÷ $11,358 annual debt service.
- Gross rent
- $25,200
- Vacancy
- $1,260
- Operating expenses
- $9,032
- NOI
- $14,908
- Annual debt service
- $11,358
- Monthly cash flow
- $296
- Purchase closing
- $5,550
- Cash invested
- $86,800
How DSCR is calculated
DSCR = NOI ÷ annual debt service
Net operating income is one year of rent after vacancy, minus taxes, insurance, HOA, land or lot rent, maintenance, and property management. Annual debt service is the monthly principal-and-interest payment times 12. A ratio of 1.00 means NOI equals the mortgage. Above 1.00, NOI covers the payment with room left over.
On the sample, NOI is $14,908 and annual debt service is $11,358, so DSCR is 1.31.
The mortgage is the denominator
Operating expenses reduce NOI. The loan payment does not. It only shows up as debt service, so a rate change moves DSCR even when rent stays the same.
No loan is not a zero
When NOI is positive and debt service is zero, the ratio is unlimited. Analyst stores that non-finite result as 0 on the memo so the field stays a number.
Cash invested stays out
Down payment and closing costs change cash-on-cash. They do not change DSCR, because coverage compares NOI with the loan payment, not with cash in.
What this number doesn’t tell you
DSCR says whether today’s NOI covers today’s payment. It does not price the asset, choose a strategy, or say the city belongs in the portfolio. BrickAtlas runs that loop after the screen: persona, metros, listings, then a strategy-aware Investment Memo.
The return on your cash
A lender-friendly DSCR can still be a weak cash-on-cash return if the down payment is large. Analyst reports both, because coverage and yield answer different people.
The payment after a refinance
BRRRR coverage uses the new loan, not the purchase loan. A purchase DSCR can look fine and still fail the refinance the strategy depends on.
Whether this market fits
A covered payment in the wrong metro is still the wrong next investment. Explore ranks cities with Atlas Score and persona Match before you underwrite an address.
FAQ
- What is DSCR on a rental property?
- DSCR is net operating income divided by annual debt service. A property with $18,000 of NOI and $12,000 of annual mortgage payments has a DSCR of 1.50. BrickAtlas computes that ratio in code.
- Does DSCR include the down payment?
- No. The down payment changes the loan amount, and the loan amount changes the payment, but the down payment itself is not in the ratio. Cash-on-cash is the metric that divides cash flow by cash invested.
- Is this the same DSCR as BrickAtlas Analyst?
- Yes. NOI uses the same operating statement as Analyst: vacancy, taxes, insurance, HOA, land rent, maintenance, and management. Debt service is the purchase loan’s principal and interest. A BRRRR memo reports a second DSCR on the refinance loan.
- What DSCR does BrickAtlas treat as strong?
- BrickAtlas marks DSCR under 1.20 as weak, from 1.20 up to 1.25 as acceptable, and 1.25 or higher as strong. The bands are a screen. Cash flow and market fit still decide the deal.
- Where should I go after a DSCR screen?
- If coverage looks workable, open Analyst on the address for cash flow, strategy, and an Investment Memo. If you are still choosing a city, start in Explore.
Take coverage into a full memo
Set a persona, explore metros that match, and underwrite the address with DSCR, cash flow, and strategy in one place.
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