Definition
Net operating income divided by annual debt service, measuring whether property income covers its loan payments.
Example
Lenders commonly require a DSCR of at least 1.25× on stabilized commercial property.
Related terms
Frequently asked questions
What does Debt Service Coverage Ratio mean in real estate?
Net operating income divided by annual debt service, measuring whether property income covers its loan payments.
How is Debt Service Coverage Ratio used in practice?
Lenders commonly require a DSCR of at least 1.25× on stabilized commercial property.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.