§Tool
Test the coverage on your Minnesota rental
01Run the numbers
Your property, your rate
Everything is calculated in your browser. Nothing you type here is sent anywhere.
Debt service coverage ratio
Enter a rate to calculate the principal and interest payment. No rate is assumed for you.
- Principal & interest
- —
- Taxes
- $0
- Insurance
- $0
- HOA
- $0
- Total monthly obligation
- —
- Rent
- $0
- Coverage headroom
- —
This calculator is an arithmetic tool, not a prequalification, an offer to lend, or a statement of terms. It does not include closing costs, prepaid items, vacancy, management, maintenance or reserves. Actual programs set their own coverage requirements, and all loans are subject to underwriting and lender approval.
02Reading the result
What the ratio means in practice
The number is objective. The requirement is not — it belongs to the program.
| Coverage | How to read it |
|---|---|
| 1.25 and above | Strong. Rent covers the payment with a real margin, enough to absorb a higher tax or insurance figure if underwriting finds one. |
| 1.10 to 1.24 | Positive but thin. The file can work, but reserves and credit tend to decide which programs are available. |
| 1.00 to 1.09 | Roughly break-even. Some programs will consider a file here, usually with stronger reserves or documented higher rent; others require more margin. |
| Under 1.00 | Rent does not cover the payment. Holding the property would rely on outside cash, which is a strategy decision about appreciation or a value-add plan. |
A worked example with round, user-style inputs: a St. Paul duplex renting for $2,400 a month in total, with principal and interest of $1,450, taxes of $3,600 a year ($300 a month), landlord insurance of $1,800 a year ($150 a month) and no HOA, has a monthly payment of $1,900. $2,400 divided by $1,900 is a DSCR of about 1.26. If the county’s non-homestead estimate comes in at $4,800 a year instead, the payment rises to $2,000 and the ratio falls to 1.20. These figures are illustrative arithmetic only, not market data or a loan offer.
These bands are a plain-language reading of the arithmetic, not any program’s requirement — each program sets its own minimum. A ratio that is comfortable on paper can still fail if the appraisal supports a lower market rent, the county’s tax figure comes in higher, or the insurance quote lands where nobody expected. That is why the calculator is the start of the conversation rather than the end of it.
03What it does not do
Four things to keep outside the arithmetic
A coverage ratio is a coverage ratio. Cash flow is something else.
Vacancy and collection loss
No property collects every month of every year. Some programs apply a vacancy factor before using the rent; your own budget should assume one regardless.
Management and leasing
A property manager typically charges a monthly percentage of collected rent plus a leasing fee. That is a real cost of ownership that does not appear in the ratio.
Maintenance and capital reserves
Roofs, furnaces, water heaters and sewer lines need a replacement budget. A property that covers its payment but not its capital needs is not cash-flowing.
Closing costs and prepaids
Lender fees, title, appraisal, recording, prepaid interest and escrow deposits are cash out of pocket at closing. They are not part of the ratio and they are very much part of the decision.
04Questions
Calculator questions
Why is the rate field blank?
What should I enter for taxes?
Should insurance be the landlord policy?
Does the calculator include vacancy or management?
Have a property in mind?
Email us the city and the rent you expect. A Loan Daddy loan specialist will follow up about the tax and insurance figures underwriting is likely to use.