Real Estate Math
A North Dakota investor pays $48,000 annually in mortgage payments (P&I) and earns $28,000 in NOI. What is the annual debt service coverage ratio (DSCR)?
A0.58
B1.05
C1.71✓ Correct
D0.42
Explanation
DSCR = NOI / Annual Debt Service = $28,000 / $48,000. with $28,000 NOI the DSCR = $28,000/$48,000 = 0.58. But that's less than 1. If the question intends annual gross income as $48,000 and NOI of $28,000 as numerator, and debt service is something else.. The formula is NOI/Debt Service. $28,000/$48,000 = 0.583. However, that58.
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