Rent targets
Break-even rent vs DSCR
Break-even rent is the rent needed for estimated income to cover expenses and debt. DSCR target rent is the rent needed to clear a coverage ratio above break-even, such as 1.20 or 1.25.
The difference
| Metric | Question it answers |
|---|---|
| Break-even rent | What rent keeps the property from falling short before income taxes? |
| Target DSCR rent | What rent supports the selected lender-style coverage cushion? |
Example
If a rental needs $2,800 to break even, it may need materially more rent to reach 1.25 DSCR. That extra cushion matters because lenders and investors do not usually want a deal that only barely covers the monthly payment.
Target rent = (Target DSCR x Debt Payment + Expenses) / Effective rent share
Find both break-even rent and target DSCR rent.
Open rent calculatorEducational information only. Actual lender screens can use different expense and income assumptions.