The DSCR Calculator
A financed buyer can't offer more than their lender will lend plus the cash they're putting down. This works out the debt service coverage ratio on a property, the biggest loan that ratio supports, and the ceiling on what a buyer can actually pay you. Apartments, rental houses and self-storage are underwritten differently, so each has its own tab.
The income
Only used to show the per-unit number. It doesn't change the ratio.
Getting to NOI
Taxes and insurance belong in here, inside the expense ratio. On the commercial side the lender compares NOI to principal and interest only — putting taxes and insurance in both places double-counts them and makes the ratio look worse than it is.
Taxes, insurance and dues
All the houses together. Check the assessor, not last year's escrow statement — a sale usually resets the assessment.
Landlord or dwelling-fire policy, all the houses together.
The A in PITIA. Leave it at zero if there's no association.
On one to four units the lender does not deduct vacancy, repairs or management. Gross rent over PITIA, and that's it — which is why a house can clear DSCR and still not cash-flow.
The loan
What it's selling for, or what you think it's worth. The LTV comes off this.
DSCR loans price above owner-occupied mortgages. Move it and watch the ratio — a point of rate moves the payment more than most people expect.
How long the payment is stretched over. Commercial paper often amortises over 25 even when the term is 5 or 10.
The rest is the down payment. Cash-out refinances usually cap about 5 points lower than purchases.
Two formulas, and which one applies to you
Lenders don't calculate DSCR the same way on every property. The line is at five units.
One to four units
Residential DSCR: gross rent ÷ PITIA. Principal, interest, taxes, insurance and association dues. No vacancy deduction, no repairs, no management fee. It's a generous formula, which is why a house can clear a 1.20 ratio on paper and still lose money in a month with a turnover.
Five units and up
Commercial: NOI ÷ annual debt service. Vacancy and every operating expense come out first, then the lender compares what's left to principal and interest only. Taxes and insurance already came out inside NOI, so they don't appear again in the debt service.
Self-storage
Commercial, same NOI formula, but usually a higher bar — often 1.25 to 1.35 — and frequently a 25-year amortisation instead of 30. A shorter schedule means a bigger payment and a lower ratio on identical income, so check it before you assume.
Why a seller should care
It's the ceiling on the offer
Most buyers of 2+ unit property borrow. Whatever your building is "worth," a financed buyer's number is their loan plus their cash — and the ratio caps the loan. Raise the NOI and you raise the loan they can get.
It tells you which lever matters
If the ratio is what's binding, more down payment doesn't help — income does. If the LTV is binding, the income is fine and the buyer just needs more cash. The calculator says which one you're looking at.
Rates move your price
Slide the interest rate and watch the maximum price move. That's not a market opinion, it's arithmetic — and it's a large part of why the same building is worth different amounts in different years.
This calculator is a rule-of-thumb tool, not a loan quote, an appraisal, or lending advice. sellmyunits.com is not a mortgage lender or broker and does not originate, arrange or refer loans. The starting rates, LTVs and minimum ratios are common ranges, not an offer, and every lender and every program underwrites differently — including how they treat vacancy, reserves, prepayment penalties and interest-only periods, none of which this tool models. Talk to a lender before you make a decision on it.