Question: what is the debt service coverage ratio formula?
Answer: To calculate the debt service coverage ratio, simply divide the net operating income (NOI) by the annual debt. ... Most lenders will require a minimum DSCR of 1.20x. If a DSCR is 1.0x, this is called breakeven, and a DSCR below 1.0x would signal a net operating loss based on the proposed debt structure.