Calculate rental NOI and DSCR
Separate rental NOI from the mortgage, then read DSCR and cash flow.
Who it is for
Use this when a lender or a partner asks for net operating income and debt coverage, and you do not want the mortgage buried inside expenses. The card title is Rental NOI & DSCR. The page is rehabfolio.com/tools/rental-noi-dscr-calculator. The heading is "Calculate rental NOI, DSCR, and cash flow without double-counting."
NOI on this page excludes loan principal and interest. Cash flow subtracts debt service afterward. That split is the point of the screen.
Before you start
- No account. Results stay in the browser.
- Scheduled rent and any other monthly income. The example rent is $3,200, with $100 of other income.
- A vacancy percent, annual tax, annual insurance, and other monthly operating expenses. The example vacancy is 5%, tax $5,400, insurance $2,400, and other operations $850 a month.
- A monthly debt service payment if you want DSCR and cash flow. The example payment is $1,303, the nearest dollar on a $191,000 loan at 7.25% for 30 years. Purchase price is only for the cap-rate line. The example price is $300,000.
Steps
Open Rental NOI & DSCR
Click Calculators, then the card Rental NOI & DSCR.
Enter income and operations
Under Enter your scenario, edit Purchase price, Monthly scheduled rent, Monthly other income, Vacancy and credit loss, Annual property tax, Annual insurance, Other monthly operating expenses, and Monthly debt service.
Read NOI before you read the loan
Under What the inputs produce, read Annual net operating income first, then Debt service coverage ratio, Acquisition cap rate, Monthly cash flow after debt, Effective gross income, and Annual operating expenses. The panel says nothing is uploaded or saved.
Share or reset
Copy shareable scenario writes the inputs to the link. Status is "Scenario link copied" or "Scenario saved in this page URL." Reset example restores the sample rent and payment.
What the fields mean
Effective gross income is a year of Monthly scheduled rent plus Monthly other income, after Vacancy and credit loss. Vacancy is a percent of that scheduled income, including other income, not a count of months. That differs from the in-app BRRRR screen, which uses vacancy months times monthly rent.
Annual operating expenses are Annual property tax plus Annual insurance plus Other monthly operating expenses times 12. The monthly box is management, maintenance, utilities, association, services, and reserves, as the help text describes. Do not also put the mortgage in that box.
Annual net operating income is effective gross income minus those operating expenses. The formula on the page is "NOI = effective gross income - operating expenses; DSCR = NOI / annual debt service."
Debt service coverage ratio is NOI divided by Monthly debt service times 12. It displays with an "x," such as 1.25x. The card is positive when NOI is at least the annual debt, and a warning when it is not. If the payment is zero, the ratio is zero because the page will not divide by zero.
Monthly cash flow after debt is NOI minus annual debt, divided by 12. Acquisition cap rate is NOI divided by Purchase price. The help text says this excludes renovation and closing costs unless you included them in the price you typed.
Tips and troubleshooting
- The FAQ states NOI is effective property income minus operating expenses before debt service and income tax, and that the mortgage is not inside NOI.
- "What is a good DSCR?" is answered on the page as: requirements vary by lender, asset, borrower, and program. Review the term sheet. The page does not mark a universal passing score.
- A warning says DSCR definitions and expense treatment vary by lender. If your lender excludes reserves, still keep a reserve visible in Other monthly operating expenses so it is not forgotten.
- Cap rate on purchase price is not a cap rate on total cost. Add rehab and closing into the price you type if you want them in the basis, or do not call the result an all-in cap rate.
- Do not type a monthly tax into Annual property tax. The label is annual. The other operations field is monthly.
- Income tax is not calculated.
What to do next
If the hold includes a refinance and cash left in the deal, use Calculate a BRRRR refinance. A wholesale fee on the way into the same property is Price a wholesale assignment fee.
Inside a workspace, the year plan is Set the annual operating plan, and recorded results are Read actual rental performance.
Next step
Continue with Try a max offer without an account.