Real Estate Math

A Utah landlord purchased a rental property for $500,000. Annual NOI is $40,000 and debt service is $28,000. What is the debt coverage ratio (DCR)?

A1.43✓ Correct
B0.70
C1.25
D2.00

Explanation

DCR = NOI ÷ Debt Service = $40,000 ÷ $28,000 ≈ 1.43.

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