Check whether a property covers its debt (DSCR)

Your property page shows DSCR, the debt-service coverage ratio, next to cap rate and cash-on-cash. It answers one question: does this property's own income cover its own mortgage. Everything here is an estimate for planning, not financial advice.

Where to find it

Open a property, go to Financials, and look at the headline tiles at the top. DSCR sits in the same row as Cap rate, Cash-on-cash and NOI (yearly).

Availability

Financials needs the Pro plan or higher. On Free the view is locked with an upgrade prompt.

What the number means

DSCR is your yearly net operating income divided by your yearly mortgage payments.

• Net operating income is your rent less your operating costs, and it does not subtract the mortgage. It is the tile labelled NOI (yearly), right beside DSCR, so you can check the division yourself.
• Mortgage payments are the twelve payments your recorded rate, amortization and loan amount work out to, taken from the Purchase and mortgage panel further down the same tab. The sentence under the tiles names both figures in dollars and says where they come from.

So a DSCR of 1.25 means the property earns $1.25 of operating income for every $1.00 of mortgage payment. Below 1.00 means it does not cover itself and something else is paying the difference.

Lenders commonly look for 1.20 or higher. That is a general convention worth knowing, not our assessment of your loan. A real lender applies their own vacancy allowance, their own stress rate and their own add-backs before they get to a ratio, so treat this as your own planning number and expect theirs to differ.

When DSCR shows a dash

A dash means one of two things, and the sentence under the tiles always says which.

• No debt service recorded. You own the property outright, you have ticked Owned outright on the Purchase and mortgage panel, or you have not entered a rate and amortization yet. There is no mortgage payment to cover, so there is no ratio.
• No rent recorded yet. The property has a mortgage but no tenancy, so there is no income to measure the payments against.

A dash is never a bad score. We deliberately do not show 0 in either case. A 0 would read as "this property covers none of its mortgage", and on a property you have simply not finished setting up that is a different and wrong statement. Add the tenancy, or the purchase and mortgage details, and the ratio appears.

When DSCR is negative

If you have rent recorded and your operating costs are higher than it, net operating income is below zero and DSCR goes negative. We show it rather than hiding it. A coverage ratio that only ever displays good news is not a coverage ratio. A ratio of exactly 0 is shown for the same reason: it means your recorded rent exactly meets your operating costs, which is a measurement and not a gap.

If the number looks wrong

• It seems too low. Check your operating costs. If you have not entered recurring costs, we estimate them from your recorded expenses, and the panel says so when it does.
• It seems too high. Check that every recurring cost is on the property. Missing insurance, property tax or condo fees make NOI look better than it is.
• It shows a dash and you do have a mortgage. Read the sentence under the tiles. If it says no rent is recorded, add the tenancy from Move-in. If it says no debt service is recorded, open Purchase and mortgage on the same tab, fill in the purchase price, down payment, rate and amortization, and make sure Owned outright is not ticked.
• The payment does not match my Mortgage tab. It will now. If you have recorded a loan on the Mortgage tab, DSCR uses that loan's real payment, and the sentence under the tiles says so. You no longer have to keep the two panels matching by hand. Where no loan is recorded, the ratio falls back to the payment your Purchase and mortgage details work out to, and the sentence names that instead.
• Which record is it using? Read the sentence under the tiles. It ends either "from the mortgage you recorded on the Mortgage tab" or "from the purchase and mortgage details below", so no figure on this panel is anonymous.
• I own it outright but a loan is still on record. Ticking Owned outright wins over both records, so the property shows no debt service at all.

Good to know

• Every figure comes from data you recorded. Nothing is invented.
• This is a planning estimate, not a lending decision and not an offer of credit.
• To see how much equity you could borrow against, see Track your property valuation and net worth.
• To see what a property has actually returned you, see See what a property has returned you.