Finance
The debt coverage ratio (DCR) for a Kentucky income property is calculated as:
ANOI divided by annual debt service✓ Correct
BAnnual debt service divided by NOI
CGross income divided by purchase price
DNOI divided by purchase price
Explanation
DCR = NOI ÷ Annual Debt Service. A DCR above 1.0 means the property generates more income than needed to service the debt. Lenders typically require a DCR of 1.2 or higher.
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