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How is DSCR calculated and what counts as rental income?

Tommy B. · Mar 9, 2026 · 892 views

New to DSCR loans and trying to understand the math. Is it gross rent or net? Does my existing mortgage payment factor in? What about property taxes and insurance?

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3 replies

Arin_B Mar 9, 2026

The DSCR formula is: Monthly Gross Rent divided by PITIA (Principal + Interest + Taxes + Insurance + HOA).

Lenders use market rent from a signed lease or appraiser rent schedule. We go down to 0.75 DSCR on the right deal.

Marcus R. Mar 9, 2026

One thing that trips people up - it is gross rent, not net. The lender does not subtract your property management fee or maintenance costs.

Arin_B Mar 9, 2026

Great point, Marcus. Some lenders will consider using an interest only payment to calculate the DSCR. Great way to get above a 1 ratio if the market rent is lower than PITIA.

How is DSCR calculated and what counts as rental income?

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