Texas DSCR Loan Calculator

Conceptually, your debt service coverage ratio is a simple formula: monthly qualifying rental income ÷ total monthly payment (PITIA). A DSCR of 1.0 means the property's gross rent equals its full monthly principal, interest, taxes, insurance, and association dues; a ratio above 1.0 means the rent exceeds the payment, and a ratio below 1.0 means there is a monthly shortfall. Individual DSCR lenders set their own minimum ratio requirements, credit rules, and down payment guidelines. The key to an accurate Texas rental property calculator is getting the local tax and insurance inputs right.

Texas investment property taxes: under Texas Tax Code §11.13, the $140,000 school district homestead exemption, the over-65/disabled exemptions, and the 10% homestead appraisal cap apply only to an owner's principal residence. Rental properties pay the full combined tax rate on market value (non-homestead properties under $5,000,000 have a 20% circuit-breaker cap on annual appraisal increases through tax year 2026, which does not reduce the initial purchase-price tax base). When you select a county and city/school district above, the calculator applies the confirmed 2025 combined rate — covering the county, city, independent school district (ISD), and applicable community college, hospital, flood, or port districts. If your property sits inside a Municipal Utility District (MUD), Public Improvement District (PID), TIRZ, or ESD, check the county appraisal district parcel record and adjust the tax input, as those special districts can add 0.1% to 1.0% or more.

Homeowners, TWIA coastal wind, and flood insurance: the Texas Department of Insurance (TDI) reports a preliminary 2025 statewide average homeowners premium of $3,489 per year (owner-occupied policies; TDI does not publish separate landlord DP averages by county, so replace our baseline with your insurance agent's landlord quote when you have one). In the 14 first-tier Gulf Coast counties — including Galveston, Brazoria, Nueces, and Jefferson — plus designated portions of Harris County east of State Highway 146 inside Pasadena, Morgan's Point, Shoreacres, Seabrook, and La Porte, private policies frequently exclude windstorm and hail. In those areas, investors often pair a no-wind policy with a Texas Windstorm Insurance Association (TWIA) wind policy, which averaged $2,919 in Galveston County and $2,636 in Brazoria County in 2025. For properties in FEMA flood zones, NFIP single-family policies in Texas had a median current cost of $779 per year (and a median full risk-based cost of $1,188.28 per year) as of August 2023.

Short-term rentals and city ordinances: if you are underwriting Texas short-term rental DSCR loans, switch the calculator to short-term rental mode to estimate monthly income from your nightly rate and occupancy. Make sure the property complies with state and city rules: Texas levies a 6% state Hotel Occupancy Tax (HOT) on stays under 30 consecutive days costing $15 or more per day, and cities enforce their own taxes and permits. Austin charges an 11% city HOT and requires a two-year STR license ($736.60 new / $369.60 renewal); San Antonio has a 17% combined HOT (9% city, 2% Bexar County, 6% state) and limits non-owner-occupied Type 2 permits ($1,000 plus an 8% surcharge for three years) to 12.5% of units on a blockface by right; Houston charges a 7% city HOT and requires a $275 annual registration; Fort Worth charges a 9% city HOT ($150 initial / $100 renewal registration) and prohibits STRs in residential zoning districts; Galveston charges a 9% city HOT and requires a $250 annual Galveston Vacation Rental (GVR) registration; and Dallas requires free registration and a 9% HOT while its zoning ordinance litigation (City of Dallas v. Dallas Short-Term Rental Alliance, No. 25-0748) is before the Supreme Court of Texas.