Why does DSCR matter?

It shows whether an asset can comfortably meet its loan payments. Lenders use it to set and monitor loan terms, and a falling DSCR is an early signal of refinancing or covenant risk.

Does STREETS calculate DSCR?

STREETS consolidates and validates the underlying income and cost data that NOI and DSCR build on; it is not currently positioned as a DSCR engine, so confirm debt-metric coverage with STREETS directly. You can compute DSCR now with the free STREETS DSCR calculator.

Reference

What is a good DSCR in real estate?

Q: What is a good DSCR in real estate?

Lenders commonly look for a Debt Service Coverage Ratio of around 1.25 to 1.35 as a minimum, often higher for riskier asset classes or shorter income. A DSCR comfortably above that range signals resilience; near or below 1.0 signals stress.

Q: How is DSCR calculated?

DSCR = net operating income divided by total debt service (interest plus principal) over the same period. A DSCR of 1.0 means income exactly covers debt payments.

DSCR tests whether a property earns enough to cover its debt. Here is what a good DSCR looks like, with a worked example and a free calculator.

What DSCR is

The Debt Service Coverage Ratio (DSCR) measures whether a property earns enough to cover its debt payments. It is net operating income divided by total debt service (interest plus principal) over the same period.

DSCR = Net Operating Income ÷ Total debt service

A DSCR of 1.0 means income exactly covers debt payments with nothing to spare. Above 1.0 there is a cushion; below 1.0 the property does not generate enough to service its debt.

A worked example

Using the NOI from our NOI example — CHF 880,000 — against annual debt service (interest and principal) of CHF 620,000:

DSCR = 880,000 ÷ 620,000 = 1.42

A DSCR of 1.42 means the property earns 1.42 times its debt payments — a comfortable cushion. Try your own figures in the free DSCR calculator.

What counts as a good DSCR

There is no single answer, but lenders commonly look for a minimum in the region of 1.25 to 1.35, and often higher for riskier asset classes or shorter income. A DSCR comfortably above that range signals resilience; one drifting toward 1.0 is an early warning of refinancing or covenant risk, well before it shows up elsewhere.

DSCR is the point where the income story meets the financing story. It builds on net operating income and your debt-service schedule; keeping the NOI side validated and current — which is where STREETS helps — makes the ratio trustworthy. See the key metrics guide for how it sits with the other measures.

Try the free DSCR calculator

Enter your NOI and debt service to get DSCR instantly, then see how STREETS keeps the income data behind it validated and current.

Open the DSCR calculator