DSCR tells lenders if the rental income covers the loan. Formula: Net Operating Income / Annual Debt Service. Many lenders want about 1.1 to 1.25 or higher, but guidelines vary. For full deal math, use the Deal Analyzer.
Property Financials
$
Total rental income before any expenses
%
Common underwriting placeholder: 30-45% of gross income
$
Principal and interest (P&I) only
Your DSCR
1.30
Strong
Meets most DSCR lender requirements.
Calculation Breakdown
Gross Annual Income$60,000
Operating Expenses-$21,000
Net Operating Income (NOI)$39,000
Annual Debt Service$30,000
DSCR = NOI / Debt Service1.30
Looking for DSCR-style financing?
If the property income can support the debt, Kiavi may be worth comparing as an investor-focused lending option.
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Frequently Asked Questions
What is DSCR?
Debt Service Coverage Ratio measures whether a property's income covers its debt payments. DSCR = Net Operating Income / Annual Debt Service. A DSCR of 1.0 means income exactly covers debt payments; above 1.0 means positive cash flow.
What is a good DSCR for Airbnb properties?
Many DSCR lenders look for roughly 1.1-1.25 or higher, but minimums vary by lender, LTV, credit profile, reserves, and property type. A higher DSCR generally improves your approval odds, but live lender guidelines should control.
What DSCR do lenders require for short-term rental loans?
Typical minimums range from 1.0 to 1.25 depending on the lender. Some STR-focused lenders accept 1.0 with compensating factors like strong credit, larger down payment, or significant cash reserves.
How is DSCR calculated for rental properties?
DSCR = (Gross Rental Income - Operating Expenses) / (Monthly Loan Payment x 12). Net Operating Income is your gross income minus operating expenses (not including debt service).
Can I use Airbnb income for a DSCR loan?
Yes, DSCR loans are popular for STR investors because they qualify based on property income, not personal W-2 income. Lenders typically use 12-month income projections or actual rental history from platforms like Airbnb and VRBO.
For informational purposes only. Not financial advice. See full disclaimer