Commercial property financing with debt coverage ratio

This will calculate: how large a commercial loan a property can actually support, working from the property's own income rather than from the buyer's.

Lenders size a commercial loan by debt coverage ratio — net operating income divided by annual debt service. At a DCR of 1.20 the property must throw off $1.20 of income for every $1.00 of loan payment. Enter two ratios to see both a conservative and an aggressive lender side by side.

The top half builds net operating income: gross rents, plus other income, less vacancy, less operating expenses. Vacancy and expenses can each be figured as a percentage of scheduled income or of gross — use the radio buttons to switch. The cap rate then values the property.