DSCR explained

Debt Service Coverage Ratio: how an investment property qualifies on its own rent, and the three numbers that decide it.

The ratio

DSCR = monthly rent divided by the monthly payment (principal, interest, taxes, insurance, and any HOA). A ratio of 1.0 means the property covers its own payment; lenders generally want to see 1.0 or higher.

The other two numbers

Down payment (or equity on a refinance): typically 10 to 20 percent.
Reserves after closing: roughly six months of payments.

Why investors use it

The decision rests on the property's income rather than personal tax returns, and title can usually be held personally or in an LLC. TK Capital Solutions is a funding brokerage, not a lender. Requirements vary by lender and program; nothing here is a promise of approval, amount, or timing.

Common questions

What if the rent doesn't quite cover the payment?: Some programs work below 1.0 with a larger down payment or reserves; others don't. It's worth a conversation before assuming either way.