What DSCR means, how to calculate it and which expenses you must never leave out of your cashflow.
DSCR stands for debt service coverage ratio: net rental income divided by the monthly loan payment. Lenders that underwrite the property rather than you focus on this number.
Net operating income (rent minus taxes, insurance, maintenance, vacancy and management) divided by the monthly payment. At 1.00 rent exactly covers the loan; most lenders want at least 1.20.
Budget 5 to 10 percent vacancy, 8 to 10 percent maintenance, 8 to 10 percent management, plus local property tax and insurance. Leave them out and almost every deal looks good.
Even when LTV allows 80 percent, the lender cuts the loan to the amount where DSCR still clears. At high rates that is often the real constraint, not the value.
More rent (rent by unit, small upgrades), lower expenses (self-manage, shop insurance) or a longer term. Interest-only raises DSCR on paper, but you build no equity.
In short
Cashflow decides whether you want the deal; DSCR decides whether a lender funds it. Model both together.
Data from public sources and licensed feeds. Not investment advice.