Debt service is a crucial factor in property analysis. It refers to the cash that is required to cover the repayment of interest and principal on a debt for a particular period. In the context of property analysis, it's the money needed to cover the mortgage or other loans tied to the property. When analyzing a property from a proforma perspective, you should include 12 months' worth of projected income, expenses, capital expenditures, and debt services in your spreadsheet. This will give you a clear picture of the property's financial health and its ability to generate enough income to cover the debt service.
Real estate can be a great addition to an investment portfolio. But as with any investment, it has t...
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