Shows the ratio between a property's net operating income for the year and its annual debt service (principal and interest loan payment).
"Net operating income (gross rental income less vacancy and operating expenses) is crucial to lenders because it's the cash the property generates to cover its mortgage payments."
You estimate a first-year gross rental income of $130,000, 6.5% vacancy, and 44% operating expenses. You want to know your debt coverage ratio if you finance $910,000 at 5.25% for 25 years.
"Operating expenses are computed as a percent of gross operating income for entries 1 - 100."
"For best results, use annual amounts for all entries."
Debt Coverage Ratio
Solves the debt coverage ratio.