Can Your Property Actually Support the Mortgage?
See if rental income covers mortgage payments. The number that determines if your investment property makes sense.
Rental property investing sounds simple: buy property, rent it out, collect cash flow. But many investors discover the hard way that their rental income doesn't actually cover their mortgage. This calculator reveals the truth before you buy. DSCR (Debt Service Coverage Ratio) is what lenders use to determine if a property makes financial sense. If your NOI divided by debt payments is below 1.0, you're cash flow negative — paying out of pocket every month to own this 'investment.' See your real number. A property might appreciate beautifully while bleeding you dry monthly. Know before you commit.
Calculator
Common use cases
- Testing if a rental property will actually cash flow
- Understanding why lenders care about DSCR
- Avoiding negative cash flow investments
- Comparing properties by real income potential
How to use
- Enter property net operating income
- Input annual debt service (mortgage payments)
- View DSCR and lending assessment
FAQ
What DSCR do lenders require?
Most require 1.20-1.25 minimum. DSCR loans for investors often require 1.0-1.25 depending on other factors.
How is annual debt service calculated?
Total annual mortgage payments including principal and interest. Some lenders include property taxes and insurance.
Can I get a loan with DSCR below 1.0?
It's difficult. Some DSCR loan programs allow it with compensating factors like lower LTV or higher reserves.
What if my DSCR is below 1.0?
The property costs you money monthly. That might be okay if you're betting on appreciation, but it's not 'passive income.'
This calculator provides illustrative estimates for planning purposes only and does not constitute financial, tax, or legal advice.