Ohio is an excellent state to open rental properties: with bountiful attractions and an investor-friendly economic system, you'd be remiss to overlook this homey state in the heartland of America.

Thankfully, you can easily finance rental properties and begin developing cash flow without concerning yourself with personal income, as long as you choose a promising property and pursue DSCR loans.

Debt service coverage ratio loans provide loans based on the property's cash flow rather than personal income. They divide the monthly rent by the monthly mortgage payments and fees like taxes, insurance, and association dues; in other words, they look to see if the property's net operating income is high enough to justify the loan.

If you're ready to generate income through investment properties, it's time to consider Ohio DSCR loans, and we'll show you how.



Reasons to Get DSCR Loans in Ohio

Real estate investors have boundless options throughout America; many flock to the coastal states or the largest cities, knowing they can secure high-income rental properties. However, there are plenty of reasons to consider DSCR loans in Ohio, a state with vast untapped potential.

Take Advantage of the Hot Ohio Housing Market

Home prices in Ohio have risen by about 4%, and economists predict that this number will increase to 6% growth by the end of 2023.

For those investing in commercial real estate, the numbers are even more promising: Ohio ranks third in the country for commercial real estate, proving that this is an excellent place to invest.

Leverage a Powerful Local Economy

There are a number of major market players holding offices in Ohio, including Nestle, Sherwin-Williams, JP Morgan Chase, Progressive Insurance, and KeyBank. All of these employees need housing; plus, where there is a major industry, small businesses, like coffee shops, grocery stores, and boutiques, thrive as well.

Harness the Changing Demographics to Your Benefit

In general, Ohioans are aging: there's expected to be a 33% increase in individuals over 60 by 2030. Aging often means downsizing, and many senior citizens prefer the comfort of a managed environment like an apartment, townhouse, or condominium.


Benefits of Getting a DSCR Loan in Ohio

When it comes to getting involved in real estate, DSCR loans are one of the best options, and Ohio makes it incredibly easy to secure the funding you need to thrive. There are few requirements of individual lenders, as the loan-to-value ratio is determined by the property's cash flow rather than personal income.

Very Little Paperwork Required

Unlike traditional home loans, you don't need personal income verification, tax returns, or a low Debt-to-Income ratio to qualify. It's a very streamlined process, meant to encourage more investment in the Buckeye State. You need very little or no personal income documentation to apply: no bank statements, no pay stubs, and no information on your debt payments. All that matters is the debt service coverage ratio for the property itself.

Low Minimum Loan Amounts

Many states have quite a high DSCR minimum loan amount for investment property, but in Ohio, you can receive a loan of as little as $75,000.

If you're thinking big, however, rest assured that you can also seek even larger property; the maximum loan for DSCR lenders in the state is $5 million.

Highly Competitive DSCR Loan Interest Rates

On average, DSCR loans have interest rates only 1% to 2% higher than that for traditional mortgages, meaning that your mortgage payment won't be much higher than it would be if you were purchasing a home for individual use. 


An Overview of Ohio DSCR Loan Programs

Ohio DSCR loans operate according to simple principles, which is that DSCR lenders want to see that your property can generate sufficient cash flow to finance the purchase.

Understanding the DSCR Ratio

Like in other states, DSCR loans in Ohio are calculated using the debt service coverage ratio, which is a simple equation that divides rent by PITIA (principle, interest, property taxes, insurance, and association dues). Your market rent rate is balanced against your monthly mortgage payment to determine whether you will be breaking even, making a profit, or losing money.

DSCR Loan Prepayment Penalty

The Ohio DSCR loan structure is unique in that there is a threshold limit, meaning that if your loan is below $107,633, your DSCR lender cannot charge you a penalty fee. This makes it much easier for investors to take out a DSCR loan for a small property, pay it off ahead of time using the property's cash flow, and then add more income-generating properties to their real estate portfolio. 

Who Can Qualify for a DSCR Mortgage Loan in Ohio?

A variety of groups can qualify for DSCR loans in Ohio, including:
  • Small businesses
  • Self-employed individuals
  • Property management company owners
  • Real estate investors
  • Landlords

Whether you're a company or an entrepreneur, you have many opportunities to make extra income through an investment property here in Ohio. 




DSCR Loan Requirements in Ohio 

Like in other states, the primary requirements for DSCR loans focus on the property's ability to generate income rather than the borrower's personal income or creditworthiness.

Credit Score

Lenders prefer that a borrower's credit score be above 680; this is similar to that for traditional home loans, so if you qualify for traditional mortgages, you can likely get a DSCR loan as well. Some lenders will accept scores as low as 620, but this is very rare.

Appraisal Form and 1007 Rent Schedule

You will need to prove that the property is worth the purchase price by having an appraiser complete an appraisal form on the property. You'll also submit lease agreements to show the rental income for this property.

Whether or not there are lease agreements to prove the property's income, you will have to complete the 1007 Rent Schedule, which identifies the average monthly rent expected for the rental property. This will identify the property's financial viability and is used to calculate the DSCR.

DSCR of 1 or More

The DSCR lender wants to see that the borrower's property income is enough to service the loan payments, which means they either need to break even or generate income. The minimum DSCR is generally 1, but many will want a ratio of 1.2 or higher before they will approve a mortgage.

Loan-to-Value Ratio

The loan-to-value ratio refers to how much you are borrowing for the subject property as opposed to its appraisal price; it's closely tied to your down payment. For DSCR loans in Ohio, lenders usually want to see an LTV of 80% or lower, meaning that you'll have to provide a down payment of at least 20%. However, many lenders will expect an LTV of 75% or less, necessitating a 25% down payment.

Loan Down Payment

As with conventional loans, you need to provide a down payment for DSCR loans. This is generally 20% or more, but your minimum down payment is determined by your credit score and the property's cash flow as determined by the DSCR. You will also need to pay closing costs as with other real estate investments.




Steps to Securing a DSCR Loan - Ohio

The process to receive an Ohio DSCR loan for the budding real estate investor is quite straightforward, consisting of only a few steps.

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Identify Your Potential Investment and Research Lenders

First, you'll need to find a property that you'd like to purchase, then research DSCR lenders in the area. Visio is one of the best DSCR lenders in the market, but we encourage you to see for yourself by comparing our rates and options to those of other DSCR lenders in the region.

Apply For the DSCR Loan

Like with other loans, you will apply for the DSCR loan with your borrower information, but you won't generally need to include things like pay stubs, tax returns, or bank statements.

Provide Documentation to Prove Cash Flow

When you apply for a DSCR loan, they will want to see the net operating income for the potential investment properties you'd like to fund. You will submit financial statements, lease agreements, and any other documentation you have for rental income verification.

Submit the Appraisal and 1007 Rent Schedule

Both the purchase price and the property's ability to generate income are considered when identifying the DSCR, so you'll have to have it appraised by a qualified appraiser before the deal can move forward.

In addition, the 1007 rent schedule is usually required even if you provide rental income information elsewhere, as it identifies the average monthly rent for the area and will be used to estimate the property's income.

Calculate Your DSCR

From this information, the lender will calculate the DSCR using the expected rental income and your monthly mortgage payment to see if the property's income justifies the loan. As mentioned, different DSCR lenders have different minimum DSCR.

Receive Funding and Close

If the DSCR is sufficiently high enough, your DSCR loan will be approved, and you'll receive the funding. Now, you'll pay your closing costs and down payment, then receive the keys to get started generating cash flow from your rental property.



Best Areas to Buy an Investment Property in Ohio


As Ohio is so diverse, you need to hone in on the specific real estate market of Ohio in which you'd like to pursue debt service coverage ratio loans, then research its average property values, market rent prices, and regional taxes you'll be expected to provide.

Here, we've broken up these sections to explain the average monthly rent and home prices, then zeroed in on specific towns that are worth a second look when determining whether you'd like to apply for DSCR loans here. These areas have fast-growing economies, rising populations, and numerous cultural attractions that will draw in plenty of tourists, making them great choices for either residential rentals or storefronts.


Northwest Ohio

Property values in Northwest Ohio are around $229,987 for single-family homes, but this varies immensely by town. Rental properties for residential real estate investors can make about $1,000 a month, while commercial real estate generates around $2,500 per month throughout the region.

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The fourth-populous city in the state, Toledo residents have an average income of $53,600, making the affordable rental property market very attractive here. The city is undergoing a strong community revitalization, which significantly opens the market for small businesses like restaurants, barber shops, and boutiques. 

Bowling Green

Bowling Green State University promises an endless flow of college students seeking out their first apartment, promising a tidy rental income for those looking to become landlords or storefront owners. Rents for apartments are about $950, while commercial real estate rental income averages between $10 and $12 per square foot.


Sandusky is home to the world-famous Cedar Point, a very popular theme park, and there's a constant need for more vacation rentals near this attraction. In addition, its downtown is quickly revitalizing, making it a great opportunity for those wishing to rent a storefront or open a business here.



Northeast Ohio

Perhaps the most famous of Ohio's regions, Northeast Ohio is home to Cleveland; however, it also boasts a number of well-heeled suburbs and institutes of higher learning. Rental income varies greatly throughout the region, and property taxes are relatively high, but the income potential is still enormous despite this.

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Average rents for an apartment in the city property range between $960 and $2,137, making it one of the priciest areas in the region. It has also gone through a strong urban renewal that makes it rife with the possibility of commercial ventures.

Shaker Heights

This is one of the most expensive suburbs of Cleveland, with an average rent of $1,500. It also has several separate shopping districts within its bounds, meaning you can easily find a great business opportunity here: each property makes about $17.64 per square foot.


Home to Kent State University, rental property here can make up to $1,300 per month, while there are excellent prospects in its large and spacious downtown.

Central Ohio

Central Ohio is known for Columbus, the state's capital, which is one of the most expensive areas in the region. This means that property values are higher, but it also means that, with its skyrocketing population, you can be assured a great return on your investment property with DSCR loans.

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In the fastest-growing real estate market in Ohio, the average residential rental property makes $1,180 per month; a commercial property's cash flow can be as much as an eye-popping $26.28 per square foot, making opening a business here very attractive indeed.


Another very expensive region, Dublin commercial rental property generates about $26.21 per square foot, while average residential rents are about $1,450.


Though not as pricey as its neighbor, Dublin residential rents are a reasonable $1,271; like other areas in Central Ohio, you can expect a very good return on investment for commercial space, boasting an impressive $25.63 per square foot.


Southwest Ohio

Home to Cincinnati, the theme park Kings Island, and the world-famous Cincinnati Zoo, there is a lot of potential in this area of Ohio, making it a great place for both commercial and residential real estate investors.

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A commercial property's cash flow here will be about $17.80 per square foot; meanwhile, the average monthly rent is $1,050, a 5% increase from previous years and still rising.


Dayton, famous for aeronautics, has a relatively low commercial rent of $15.24 per square foot, and apartments have a going rate of $1,007 a month. This makes it a great opportunity for smaller businesses hoping to corner the market in their specific niche.

West Chester

In contrast to Dayton, tony West Chester has average rents between $944 and $1,254; its commercial spaces are also more expensive, at about $17.25 per square foot.


Southeast Ohio

Laid-back Southeast Ohio is mostly known for its abundant parks and natural resources, making it an excellent option for those who would like to open boutiques and vacation rentals around Hocking Hills State Park. However, it's also growing in industry, drawing more workers to the region.

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While a relatively small town of only 21,000, home rental income varies between $800 and $1,200, and commercial real estate investors can expect to make about $18 per square foot.


Lovely Logan, home of Hocking Hills State Park, boasts excellent rates for vacation rental properties: some net as much as $400 a night. While its commercial rental income is low, this may rise as Hocking Hills grows in popularity.


Waverly is very rural, and you'll be mostly looking at farmland, which averages about $7,763 per acre. As of now, residential real estate investors have a clear advantage. Rents here are around $736 per month.



Closed DSCR Loans Ohio

Check out some of Visio Lending's recently closed DSCR loans in Ohio.


Columbus LTR


Columbus, OH

  • $169,500 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.26
Youngstown LTR


Youngstown, OH

  • $140,250 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 2.15
Columbus STR


Columbus, OH

  • $179,000 Loan Amount
  • Cash-Out Refinance
  • STR
  • DSCR: 2.07

Frequently Asked Questions

Most commercial properties can be financed with DSCR loans, including:

  • Single-family rentals
  • Multifamily rentals
  • Condominiums
  • Townhouses
  • Offices
  • Retail spaces
  • Vacation rentals
  • Manufacturing facilities
In short, most income-generating properties are eligible for DSCR loans; they simply can't be used for private residences that won't be rented out.

Yes, absolutely. There is no limit to how many properties you can fund with a single DSCR loan, unlike traditional home loans. This is why DSCR loans are so popular with real estate investors: they're flexible and highly convenient.

You can choose a fixed rate or variable rate for your DSCR loan; you can also choose different loan terms, like 15-year, 20-year, or 30-year.

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Our DSCR Loans in Ohio have:

  • · Full 30 year terms, no balloons for rental residential properties

  • · The ability to finance in an LLC

  • · No tax documents or personal income verification

  • · Real estate investor-friendly loan programs

  • · Interest only loan options


Contact Us to Start Your Loan