
What Is a Bad DSCR Ratio for Rental Property?
A bad DSCR ratio is one that leaves no margin for normal operating volatility and turns a manageable rental into a fragile one.
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A bad DSCR ratio is one that leaves no margin for normal operating volatility and turns a manageable rental into a fragile one.

A good DSCR ratio depends on your strategy, but most investors should target a buffer above lender minimums to reduce refinance and vacancy risk.

A DSCR of 1.25 means the property generates 25% more income than needed to cover debt service, which is why many lenders use it as a qualification floor.