Common Real Estate Terms

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There are currently 4 names in this directory beginning with the letter D.
Debt Service
The Debt Service refers to the periodic payments required to cover the interest payments, and usually also including a portion of the principal amount, of a loan.
Debt Service Coverage Ratio (DSCR)
The Debt Service Coverage Ratio (DSCR) measures the cash flow available to cover the property's debt obligation. This ratio is calculated by dividing the net operating income by the total debt service. A DSCR of 1.0 indicates there is enough net operating income to cover 100% of the debt service.
Depreciation involves allocating an asset's cost over its useful life. By depreciating assets, companies expense a portion of the asset's cost each year the asset is in use while earning revenue on the investment.
Distributions are made based on the cash flow of the property and profits made when it is refinanced or sold. The limited partner's portion of the profits is paid through these distributions, which are sent monthly, quarterly, or annually, and when a property is refinanced or sold.
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