Consider a property with NOI of $72,000 and a debt coverage ratio of 1.2 applied to first year NOI.What would be the estimated monthly mortgage payment?

Question

Quizplus · Accepted Answer

The debt coverage ratio (DCR) is defined as NOI divided by the debt service. Given a DCR of 1.2 and an NOI of $72,000, the annual debt service is $72,000 / 1.2 = $60,000. To find the monthly mortgage payment, divide the annual debt service by 12 months: $60,000 / 12 = $5,000.

Consider a Property with NOI of $72,000 and a Debt