Debt Service Coverage Ratio (DSCR): Formula, Example & Interpretation
About this lesson
In this video, I break down the debt service coverage ratio (DSCR), one of the most important metrics lenders and investors use to evaluate commercial real estate deals. You'll learn how to calculate net operating income (NOI) and debt service, then combine them to arrive at the DSCR formula. I also walk through how to interpret your DSCR result and apply it with a clear, real-world example. Whether you're analyzing your first property or preparing for a commercial real estate loan, this video gives you everything you need to understand the debt service coverage ratio. Chapters: 0:00 - Debt Service Coverage Ratio (DSCR) Defined 0:42 - Net Operating Income (NOI) Explained 1:40 - Debt Service Explained 3:20 - DSCR Interpretation 4:25 - DSCR Example 6:27 - Wharton Real Estate Certificate 🎓 *Wharton & Wall Street Prep Real Estate Investing & Analysis:* https://ryano.finance/wharton-real-estate *Free DSCR calculator:* https://ryanoconnellfinance.com/calculators/dscr-calculator/ *Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.
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