DSCR Calculator & Analysis
Understand Debt Service Coverage Ratio, calculate your DSCR, and discover strategies to improve your ratio for better loan terms and financing qualification.
DSCR Calculator
DSCR Thresholds
Property generates insufficient income to cover debt service. Lenders will not finance or will require substantial equity injection.
Barely adequate coverage. Limited room for income fluctuations. Most lenders require higher ratios for acquisition financing.
Good coverage with adequate cushion for market downturns. Most institutional lenders prefer this range for NNN loans.
Excellent coverage indicating strong cash flow generation. May qualify for better rates and terms from lenders.
Lender Requirements by Property Type
| Property Type | Min DSCR | Min Lease Term | Notes |
|---|---|---|---|
| Retail (NNN) | 1.25x | 10 years | Stable triple-net essential; single tenant adds risk premium |
| Industrial | 1.20x | 8 years | Long-term industrial leases popular; logistics-focused |
| Office | 1.35x | 10 years | Higher DSCR needed due to current market headwinds |
| Medical/Healthcare | 1.15x | 10 years | Resilient cash flows; lower leverage typical |
| Mixed-Use | 1.30x | 12 years | Diversification benefit; tenant concentration risk |
Tips for Improving DSCR
Increase NOI
Raise rents during lease renewals, implement expense controls, reduce vacancy through proactive tenant management
Reduce Debt Service
Refinance at lower rates, extend loan term to reduce annual payments, increase down payment to lower loan amount
Extend Lease Terms
Lock in long-term leases to demonstrate income stability to lenders. Strong tenant covenants improve perceived credit quality.
Tenant Quality
Target investment-grade tenants with strong credit ratings. NNN properties with credit tenants command premium pricing and lower cap rates.
Property Improvements
Capital improvements can justify rent increases and attract better tenants, improving overall property credit profile and value.
Lower Interest Rates
Shop loan programs and lenders aggressively. Better credit profile and property quality can reduce borrowing costs by 50-100 bps.
Monitor Your DSCR
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