DSCR & Rental Cash Flow Calculator

Debt Service Coverage Ratio is a simple comparison. It divides your rental property's net operating income by its annual mortgage payments. The result tells you how many times the property's income covers its debt. A ratio of 1.5 means the property produces 50% more income than the loan costs each year.

DSCR matters because it separates the property from the owner. A lender does not care how much you earn at your job. It cares whether the building can pay its own mortgage from rent. This is why DSCR is the standard test for rental property financing and why investors quote it on every deal.

• 1.25 or higher. This is the target most lenders set. The property covers its mortgage with at least a 25% cushion for vacancies and surprise repairs. At this level you are likely to qualify for financing and keep positive cash flow.
• 1.0. Break-even. Income covers the mortgage exactly, leaving nothing for unexpected costs. A lender may still approve it, but there is zero room for error.
• Below 1.0. Negative. The rent does not cover the mortgage, so you fund the difference every month. Most lenders will not approve a rental loan at this level.

The color coding on the DSCR card in this calculator follows the same logic: green at 1.25+, amber in the break-even range, and red below 1.0.

A DSCR loan is a mortgage built for rental property. Instead of reviewing your W-2 income, the lender reviews the property's income. If the DSCR clears the lender's minimum, usually 1.0 to 1.25, the rent alone supports the loan. You still need a solid credit score and enough cash for a down payment, but you do not need to document salary income.

These loans appeal to investors with strong income they cannot easily document, such as self-employed owners or landlords with many properties. Rates are typically a bit higher than a standard owner-occupied mortgage, because the lender takes on more risk. The trade-off is a faster, simpler approval path based on the asset.

Net operating income and cash flow are two different numbers. NOI measures how profitable the property is on its own. Cash flow is what actually lands in your pocket. Start with gross rent, subtract vacancy and operating expenses, and you get NOI. Subtract the mortgage payment from NOI and you get cash flow.

A property can show a healthy NOI yet produce weak cash flow if the loan is large or the rate is high. That is why this calculator pairs the two. The DSCR tells you how the income covers the debt, while the monthly cash flow tells you what you really keep. Cash-on-cash return then puts that cash flow next to your total cash invested, so you can judge whether your money is working hard enough.

Lenders can vary in how they underwrite rental income. This calculator uses the classic real estate DSCR formula: NOI divided by principal and interest debt service. Some residential investor loan programs may instead compare rent to PITIA, so always confirm the lender's exact method before relying on a qualification estimate.

This is a planning formula, not a universal underwriting standard. Confirm the applicable method and minimum with the lender or loan program you are considering.

Enter your monthly rent and vacancy rate in the Income section, then add your annual operating expenses. Move down to the loan section and set the down payment, closing costs, loan amount, interest rate, and term.

• Adjust the vacancy slider to reflect how many months the unit sits empty each year. A 5% vacancy on a $2,800 rent equals one empty half-month per year
• Enter annual expenses as the yearly total. The calculator converts them to monthly automatically
• Watch the DSCR card flip color as you adjust rent, expenses, or the loan. Every input updates the ratio instantly
• Use the Share button to copy a link with your exact inputs, useful when comparing several properties

All calculations run in your browser. No data leaves your device.

Net operating income is gross rent minus vacancy loss minus monthly operating expenses. Operating expenses are your annual property tax, insurance, HOA dues, and maintenance totals divided by 12. DSCR is the annual NOI divided by the annual debt service, which is simply the monthly mortgage payment times 12. Because the annual values cancel out, DSCR equals monthly NOI divided by the monthly payment.

Cash-on-cash return is the annual cash flow divided by your total cash invested, which is the down payment plus closing costs, shown as a percentage. The monthly mortgage payment uses the standard amortization formula with your loan amount, interest rate, and term. All of this runs locally in your browser, so your numbers never touch a server.