DSCR Loan Calculator for Detroit Rentals
See whether a Detroit rental's rent covers its loan payment the way a DSCR lender measures it. Then read your result against real Detroit rents, taxes, and price points from houses we manage.
Talk through your dealRun your numbers.
Enter the monthly rent, loan amount, rate, term, and the monthly property taxes and insurance for the house. Use the parcel's real Detroit tax bill, not an estimate.
A renovated west-side single-family home.
Take a house like the ones in our case studies: renovated, appraised around $55,000, and rented for $1,000 a month. Borrow 75% of value at 8% over 30 years.
| Monthly rent | $1,000 |
|---|---|
| Loan (75% of $55,000) | $41,250 |
| Principal and interest (8%, 30 years) | $303 |
| Property taxes (non-homestead, approx.) | $195 |
| Insurance | $100 |
| PITIA | $598 |
| DSCR ($1,000 ÷ $598) | 1.67 |
Coverage like that is common in Detroit because prices are low relative to rent. The catch is the loan size. A $41,250 loan sits under the minimum loan amount at many DSCR lenders, which is why a lot of Detroit investors buy with cash, renovate, lease, and then refinance several houses together or use a local portfolio lender.
What your DSCR means.
Rent just covers PITIA. Many DSCR lenders will still lend here, usually at a higher rate or a lower loan-to-value.
A real cushion for repairs and a vacant month. Most DSCR lenders are comfortable here.
The level most lenders price best. Below 1.0, expect stricter terms or a no-ratio program.
These are commonly cited ranges, and lenders vary. Each one sets its own minimum DSCR, loan size, credit score, and reserve requirements.
Detroit context
- Price points. The renovated single-family homes in our case studies were bought for $30,000 to $35,000 and are valued around $50,000 to $65,000 today.
- Rents. Rent collected on those houses has averaged roughly $900 to $1,200 a month. The block matters as much as the house, so check comparable rentals within a few streets.
- Taxes. Detroit's non-homestead property tax is high. Pull the parcel's actual bill. An owner-occupied tax figure from a listing will overstate your DSCR.
- Loan minimums. A strong DSCR on a $40,000 loan can still be a no if the lender's minimum is higher. Ask about the minimum loan amount first.
- What the ratio leaves out. DSCR ignores repairs, vacancy, turnover, and management. A 1.25 can still lose money in a year with a new furnace and a two-month vacancy, so keep reserves.
Detroit rentals we renovated, leased, and manage.
Real purchase prices, renovation costs, and rent ledgers. Plug any of them into the calculator to see how a lender would read the house today.
15xxx Inverness Street
$30,000 purchase, about $48,000 all-in, valued near $50,000. One tenant since November 2023, $34,490 in rent collected.
Read the case study West side · 52.5% ROI72xx Artesian
$30,000 purchase, about $46,000 all-in, valued near $55,000. Rented by December 2024, $15,250 collected so far.
Read the case study Two tenancies · 53.4% ROI15xxx Woodingham Drive
$35,000 purchase, about $60,000 all-in, valued near $65,000. Two leases and $27,260 in rent across the hold.
Read the case studyDSCR loans in Detroit.
What is a DSCR loan?
A debt service coverage ratio (DSCR) loan is an investor mortgage that qualifies the property instead of your personal income. The lender divides the monthly rent by the monthly payment (principal, interest, taxes, insurance, and any HOA dues, often called PITIA). If the rent covers the payment by enough, the property qualifies.
What DSCR do lenders want for a Detroit rental?
Many DSCR lenders will lend at 1.0, price better at 1.2, and give their best terms at 1.25 or higher. Those are common ranges, not rules. Lenders vary, and some go below 1.0 with a bigger down payment or a higher rate.
Why does a Detroit rental with a strong DSCR still get turned down?
Usually because of loan size, not coverage. A renovated Detroit single-family home often appraises between $50,000 and $70,000, so a 75% loan lands near $40,000 to $50,000. Many DSCR lenders have minimum loan amounts around $75,000 to $100,000. Ask about the minimum loan amount before you pay for an appraisal.
What rent does the lender use?
Most lenders use the lower of the signed lease or the appraiser’s market rent estimate. On a vacant or just-renovated house, expect them to use the appraiser’s number. Section 8 rents can count when the lease and housing assistance contract are in place, but check with your lender.
How do Detroit property taxes affect DSCR?
A lot. Detroit’s non-homestead millage is among the highest in Michigan, so a rental pays noticeably more in property tax than a similar owner-occupied home. Use the real tax bill for the parcel, not a statewide average, or your DSCR will look better than it is.
Can Great Lakes PMG get me a DSCR loan?
No. We are a licensed real estate brokerage and property manager, not a lender. We help you find, renovate, lease, and manage the property, and we can walk through the numbers a lender will look at so you go in prepared.
Not financial, lending, legal, or tax advice. The calculator and the ranges on this page are estimates for planning. Lenders set their own terms, and every property is different. Confirm numbers with your lender, CPA, and attorney before you buy. Past results in our case studies don't guarantee future returns.
Want a second set of eyes on the deal?
Book a free call. We'll look at the house, the block, the rent, and the renovation scope, and tell you what we'd expect a lender to see.