Real Estate Math
A Kansas real estate investor has a property with an annual NOI of $55,000 and a mortgage debt service of $38,000. What is the debt coverage ratio (DCR)?
A1.25
B1.45✓ Correct
C1.55
D1.65
Explanation
DCR = NOI ÷ Annual Debt Service = $55,000 ÷ $38,000 = 1.447 ≈ 1.45. Using the values given ($55,000, $38,000), apply the appropriate formula.. The correct answer is 1.45.. This is a common calculation on the Kansas real estate exam.
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