An apartment community with an effective gross income of $2,123,235, total operating expense of $1,166,489, and monthly debt service of $60,977 has a debt service coverage ratio of ___________.

The debt service coverage ratio (DSCR) is a factor used by banks to qualify an apartment for a loan.

  • It is calculated by dividing the net operating income by the debt service
  • For this apartment, the DSCR is ($2,123,235 - $1,166,489) / ($60,977 * 12 month), or 1.31
  • Typically, most commercial lenders require a DSCR of at least 1.15 to 1.35