DSCR is important to the real estate investors because it informs the lenders how capable the property is to support its debts. A higher DSCR means that the property will have ability to pay its loan and therefore cuts down on risk for the lender. Building owners who have properties with a higher DSCR have an advantage over those with lower DSCR because the loan terms come with lower interests or higher loan balances. From the investor’s perspective, a healthy DSCR simply means that the property in question will continue to yield profits hence will be financially sound.
