What to put in each field
Monthly rent. For a multi-unit building, add every unit's rent together. If a unit is vacant, use what it would rent for today — not what you hope to get after cosmetic work. If you do not know, that gap is your first research task.
Loan amount. The amount you would borrow, not the purchase price. Purchase price minus your down payment, or the new loan balance on a refinance.
Annual property taxes. The county's current bill for the property. In Illinois, taxes are paid in arrears in two installments, so the bill you see is for a year that has already passed — it is a reasonable starting point, not a guarantee about next year.
Annual insurance. A landlord policy for that building, at replacement cost, in the entity that will hold title. A homeowner quote is not a substitute and will understate the number.
Monthly HOA. Association dues where they exist. On a condo or townhome rental they can move the ratio materially.
Interest rate and amortization. Use the rate you were quoted and the term the program offers. The field is blank by default; we do not fill it in.
Reading the result
A ratio of exactly 1.00 means the rent pays the housing cost and nothing else. There is no money in that building for vacancy, a water heater, a management fee or a bad tenant — and those things happen to every rental. That is why investors look for a cushion above break-even, and why each wholesale program sets its own minimum coverage.
The number is not a verdict. Two files with the same ratio can have very different risk: a 2-flat in a dense Chicago neighborhood with separate utilities and long-tenured tenants is not the same bet as a rural single-family rental with one income source. Underwriters know this and price or decline accordingly.
What the calculator leaves out
- Vacancy and credit loss — the assumption that some months are empty
- Maintenance, repairs and capital reserves
- Property management, typically a share of collected rent
- Utilities the landlord pays in a master-metered building
- Leasing commissions and turnover costs
- HOA special assessments
None of those belong in the DSCR ratio itself — the ratio measures the lender's coverage, not your cash flow. But they belong in your decision. A building at a comfortable coverage number can still be a poor investment if the operating costs eat the difference, and a building at a thin one is a bet on everything going right.
Run two scenarios, not one
Run the deal at the rent you believe and at the rent the appraiser is likely to support. Run the tax bill at today's figure and at a re-assessed figure. Run the insurance at your quote and at your quote plus a cushion. The scenario that still works is the one worth pursuing — and knowing the spread beforehand is what lets you negotiate price instead of asking for an exception later.