Deal repair
How to improve DSCR before applying for a loan
To improve DSCR, increase net operating income, reduce the monthly debt payment, or both. In practical rental analysis, that usually means testing rent, vacancy, expenses, rate, loan amount, and down payment assumptions.
Levers that can improve DSCR
| Lever | How it helps |
|---|---|
| Higher rent | Raises effective income if the rent is realistic and supportable. |
| Lower vacancy | Improves effective rent, but should not be unrealistically low. |
| Lower operating costs | Increases NOI when insurance, HOA, maintenance, or management can be reduced. |
| Larger down payment | Reduces loan amount and monthly debt service. |
| Lower rate or longer term | Can reduce monthly payment, though lender pricing may vary. |
What not to do
- Do not remove realistic expenses just to make the ratio look better.
- Do not use a rent number that cannot be supported by lease income, market rent, or operating history.
- Do not ignore insurance and tax increases after closing.
Test each lever and see which one changes the ratio most.
Run a DSCR scenarioEducational information only. Actual lender underwriting may use different assumptions.