How do you calculate the DSCR ratio?

DSCR = Monthly Gross Rental Income divided by Monthly Debt Obligation (PITIA).

Example: $2,500 rent divided by $2,000 PITIA = 1.25 DSCR.

• Above 1.0 = positive cash flow
• 1.0 = breaks even
• Below 1.0 = rent does not cover payment

Lenders use gross rent, not net. Your W2 income is not a factor at all.