The residential rental convention
This site’s calculator divides monthly rent by principal, interest, taxes, insurance, and association dues (PITIA). At $3,000 rent and $2,400 PITIA, the ratio is 1.25x.
Know which formula applies
Some commercial loans use net operating income divided by debt service. That is a different calculation. The lender’s program determines the applicable definition and qualifying income.
Separate coverage from profit
Rent above PITIA does not account for vacancy, repairs, capital reserves, or management. Include those expenses in a separate cash-flow analysis.
Underwriting is broader than a ratio
Property eligibility, credit, reserves, valuation, rental evidence, and program rules can all matter. Calculator results do not establish approval or program eligibility.
Further reading: Residential DSCR calculation explained. That lender’s eligibility criteria are not LendHous terms.