Debt Service

Debt Service: Debt service refers to the total amount of principal and interest payments made over a specified period of time to repay borrowed money. In real estate, it refers to the regular payments that are made to cover the repayment of interest and principal on a debt for a particular property.

Debt service payments are typically made on a monthly or quarterly basis. They are a crucial factor to consider when analyzing the profitability and financial feasibility of a real estate investment. The ability of a property to generate sufficient rental income to meet its debt service obligations is a key indicator of the investment's financial health.

The total debt service on a property is used in the calculation of the Debt Service Coverage Ratio (DSCR), a measure used by lenders to assess the ability of a property to cover its debt obligations from its operating income.