Can I buy an investment property in Denver with a DSCR loan?
If you’re exploring ways to buy an investment property in Denver, you’ve probably heard about DSCR loans also known as Debt Service Coverage Ratio loans. These loans are becoming
a popular option among real estate investors who want to build wealth through rental properties without the strict income documentation required by traditional mortgages.
As a Denver Realtor with more than eight years of experience and a background in construction, I’ve helped many investors navigate creative financing strategies like DSCR loans to make the most of Denver’s thriving real estate market. Whether you’re looking to purchase your first rental or expand your portfolio, understanding how these loans work and how they fit into Denver’s market can set you up for long term success.
What Is a DSCR Loan?
A DSCR loan (Debt Service Coverage Ratio loan) is designed for real estate investors. Unlike traditional loans that focus on your personal income, a DSCR loan evaluates whether the property itself generates enough income to cover its expenses specifically, its debt payments.
In short:
If the property’s rental income covers the mortgage payment (and then some), you could qualify for a DSCR loan.
This makes DSCR loans ideal for investors who:
- Have strong rental income potential but limited verifiable personal income.
- Own multiple investment properties.
- Want a simplified approval process without the usual tax returns and employment verifications.
Why Denver Is Ideal for DSCR Loan Investments
Denver continues to be one of the most attractive cities in the U.S. for real estate investors. The combination of a growing population, diverse job market, and high rental demand has made it a consistent hub for both short and long term rental opportunities.
Neighborhoods like Highlands, RiNo, Capitol Hill, and Cherry Creek attract steady tenant interest thanks to their mix of walkability, lifestyle amenities, and access to business districts. Meanwhile, suburban areas such as Arvada, Lakewood, and Littleton appeal to families seeking more space without sacrificing proximity to the city.
With rental demand remaining strong, DSCR loans offer an incredible pathway for investors who see Denver as both a vibrant community and a sound financial opportunity.
How DSCR Loans Work in Denver
To qualify for a DSCR loan, lenders typically calculate your property’s ratio by dividing its gross rental income by its total monthly debt obligations (including mortgage, taxes, and insurance).
For example:
If your property brings in $4,000 per month in rent and your monthly expenses are $3,000, your DSCR is 1.33 meaning the property earns 33% more than it costs to maintain. Most lenders prefer ratios of 1.0 or higher, though requirements vary.
These loans can often be used for:
- Single family homes
- Duplexes, triplexes, and fourplexes
- Condos and townhomes
- Certain short term rental properties (if local zoning allows)
Why Work with a Knowledgeable Denver Realtor
While DSCR loans can simplify financing, success still depends on choosing the right property in the right neighborhood one that will consistently attract tenants and produce strong rental income. That’s where working with an experienced, client centered Denver Realtor becomes essential.
With my background in construction and real estate, I help investors evaluate properties from every angle from structural integrity to cash flow potential. At Compass Real Estate Denver, I combine innovative tools and market insights to help you make data driven decisions with confidence.
My approach is rooted in integrity, hard work, and heart. Whether you’re a first time investor or an experienced landlord, I believe in providing clarity, strategy, and care every step of the way ensuring your Denver investment works for both your goals and your lifestyle.
Let’s Talk About Your Denver Investment Goals
If you’re considering buying an investment property in Denver with a DSCR loan, now is an excellent time to explore your options. With the right guidance and strategy, you can tap into Denver’s strong rental market while leveraging financing designed specifically for investors.
Let’s connect today I’d be happy to walk you through current DSCR loan opportunities, top performing neighborhoods, and strategies to maximize your return.
