Unlock New Opportunities: How DSCR Can Help You Build Your Real Estate Portfolio
Rather than looking at your personal income verification or going through complicated conventional loan underwriting procedures, you can use your DSCR to estimate the potential income value of a property versus its assumed debts.
The post Unlock New Opportunities: How DSCR Can Help You Build Your Real Estate Portfolio appeared first on LUXUO.
Image: Scott Graham | Unsplash
Are you looking to grow your real estate portfolio" There are many ways to increase your investments, from diversifying to investing in new properties. One popular strategy among modern investors is to make use of a metric called the Debt-Service Coverage Ratio (DSCR). Rather than looking at your personal income verification or going through complicated conventional loan underwriting procedures, you can use your DSCR to estimate the potential income value of a property versus its assumed debts. Let?s take a closer look.
A Quick Primer on DSCR
DSCR is a rental property?s performance number. It takes the net operating income and divides it by expenses or debt services. A DSCR of 1.0 means your property makes enough to cover its debts but not to earn a profit. Less means you are losing money on the property, more means you are profiting.
To increase the DSCR of a rental, you can either increase the property value, increase rent, or decrease operating expenses. It?s a fine balance to run a property efficiently while maintaining a good relationship with your tenants. A good strategy for raising...
The post Unlock New Opportunities: How DSCR Can Help You Build Your Real Estate Portfolio appeared first on LUXUO.
Image: Scott Graham | Unsplash
Are you looking to grow your real estate portfolio" There are many ways to increase your investments, from diversifying to investing in new properties. One popular strategy among modern investors is to make use of a metric called the Debt-Service Coverage Ratio (DSCR). Rather than looking at your personal income verification or going through complicated conventional loan underwriting procedures, you can use your DSCR to estimate the potential income value of a property versus its assumed debts. Let?s take a closer look.
A Quick Primer on DSCR
DSCR is a rental property?s performance number. It takes the net operating income and divides it by expenses or debt services. A DSCR of 1.0 means your property makes enough to cover its debts but not to earn a profit. Less means you are losing money on the property, more means you are profiting.
To increase the DSCR of a rental, you can either increase the property value, increase rent, or decrease operating expenses. It?s a fine balance to run a property efficiently while maintaining a good relationship with your tenants. A good strategy for raising...
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