Debt Service Coverage Ratio (DSCR)

Advanced 🏠 Real Estate

Definition

Annual net income divided by annual debt payments, basically whether you're making enough money to pay your mortgage.

Example Usage

The commercial property has a 1.25 DSCR, meaning income exceeds debt payments by 25%.

Origin

Financial analysis terminology used in commercial lending

Fun Fact

Most lenders require a minimum DSCR of 1.2 to 1.25 for commercial loan approval.

Source: Commercial Real Estate Lending

Related Terms

Intermediate

homestead exemption

A legal provision that protects a portion of a home's value from creditors and property taxes. Because even the government agrees you shouldn't be completely homeless.

🏠 Real Estate
Intermediate

NOI

Net Operating Income—the annual revenue from a property minus operating expenses, before debt service and taxes. The number that actually matters when evaluating investment properties.

🏠 Real Estate
Beginner

exclusive listing

A contract giving one real estate agent the sole right to sell a property for a specified period, even if the owner finds a buyer independently. It's monogamy for real estate, and the agent gets paid regardless of who does the actual work.

🏠 Real Estate
Beginner

Sellers Market

A hellscape for buyers where every listing gets 40 offers, homes sell for $200K over asking, and you have to write a love letter to the seller explaining why you deserve their split-level ranch. Sellers just sit back and watch the chaos.

🏠 Real Estate
Advanced

conveyance

The fancy legal term for transferring property ownership from one party to another, complete with all the paperwork that makes it official. It's both the act of moving title and the document that proves you now own that thing. Real estate's way of saying 'this is yours now' in the most formal way possible.

🏠 Real Estate
Beginner

cosmetic rehab

Property improvements limited to aesthetic updates like paint, flooring, and fixtures without addressing structural or mechanical systems. It's the difference between a facelift and actual surgery.

🏠 Real Estate

Translate This Term

See “Debt Service Coverage Ratio (DSCR)” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on XShare on FacebookShare on LinkedIn

Discover a Term

Intermediate

hippocrate

A delightfully misspelled version of 'hypocrite' that has taken on its own life in internet discourse. Describes someone...