A Baton Rouge DSCR 5-10 unit rent roll is the document that decides how much you can borrow on a small apartment building. For Baton Rouge investors eyeing five to ten units, the lender cares less about your paycheck and more about what the building earns. This guide explains how a Baton Rouge DSCR 5-10 unit rent roll is read, what lenders adjust, and how to prepare yours.
DSCR stands for debt service coverage ratio. Lenders divide the property’s monthly rent by its monthly payment of principal, interest, taxes, insurance, and association dues. A ratio of 1.0 means the rent covers the payment. Many lenders want 1.0 to 1.25 on 5-10 unit buildings.
Why the Baton Rouge DSCR 5-10 unit rent roll drives your DSCR approval
On a single rental house, one lease tells the story. On a small apartment building, the underwriter needs a full Baton Rouge DSCR 5-10 unit rent roll to see every unit, every lease, and every deposit in one place.
The Baton Rouge DSCR 5-10 unit rent roll lists each unit, its current tenant, the monthly rent, the lease end date, and the deposit held. It also shows which units are vacant. This is how a lender confirms the income that supports your loan.
The big advantage for investors is that DSCR financing looks at the property, not your tax returns. You do not need to show personal W-2 income to qualify. That makes a strong Baton Rouge DSCR 5-10 unit rent roll the most valuable paper in your file.
What lenders check on a Baton Rouge rent roll
Underwriters read a Baton Rouge DSCR 5-10 unit rent roll line by line. They compare it to leases and to market rents. Expect them to look at these items:
- Signed leases that match each rent figure listed.
- Rents that sit near the Baton Rouge market for that unit size.
- Vacancy, usually underwritten at a minimum allowance even if the building is full.
- Rent collected over recent months through bank statements.
- Month-to-month tenants, which some lenders discount.
If a rent on paper is far above market, the appraiser can reduce it. That lowers your DSCR. A clean Baton Rouge DSCR 5-10 unit rent roll that matches the market keeps the ratio strong.
Baton Rouge market factors that shape the numbers
Baton Rouge rewards investors who underwrite carefully. Demand comes from LSU, state government, healthcare, and the industrial corridor along the river. Areas near the university and mid-city often see steady renter demand for smaller units.
Property insurance and taxes matter just as much as rent. Louisiana insurance premiums have risen, and the premium goes straight into the DSCR payment. Get an insurance quote before you finalize your Baton Rouge DSCR 5-10 unit rent roll math. A surprise premium can change a deal from a 1.25 to a 1.0.
The HUD Fair Market Rent tables are a helpful reference point for checking whether your unit rents are reasonable. You can review them at HUD User Fair Market Rents.
How to build a stronger Baton Rouge DSCR 5-10 unit rent roll
Preparation can lift your approval odds and your terms. Start early, and keep your records simple. A tidy Baton Rouge DSCR 5-10 unit rent roll signals a well-run building.
- Collect every signed lease and match it to the rent roll.
- Add deposits and lease dates for each unit.
- Gather 2 to 3 months of rent deposits.
- Document expenses such as taxes, insurance, utilities, and repairs.
- Price any vacant unit at market, not at wishful rent.
If you are buying, the seller’s Baton Rouge DSCR 5-10 unit rent roll is only a starting point. Verify it. If a lender cannot match deposits to rents, the loan amount can shrink.
Down payment and reserves on 5-10 unit DSCR loans
Plan for a larger down payment than on a one-unit rental. Many programs ask for 20 to 25 percent down on 5-10 unit buildings, and stronger ratios can earn better pricing. Lenders also like to see cash reserves, often several months of payments, after closing.
Loan terms vary by borrower and property. Credit score, loan size, and the strength of your Baton Rouge DSCR 5-10 unit rent roll all move the rate and the required cash. Not every program fits every property, so talk through your scenario before you make offers.
First-time investor tips for Baton Rouge apartments
New investors often focus on purchase price. Experienced investors focus on net income. Build a simple sheet from your Baton Rouge DSCR 5-10 unit rent roll: total rent, minus vacancy, minus operating costs, then compare to the payment.
Look beyond Baton Rouge city limits too. The 50 mile area around the city includes parishes where small apartment buildings can pencil out well. Check flood zones and insurance first, because they affect payment and DSCR.
Next steps
Ready to see what your building can support? Send us the property address, the unit count, and your draft Baton Rouge DSCR 5-10 unit rent roll. We will help you map your DSCR before you spend on an appraisal. Learn more about our mortgage services at Max Mortgage.
Call our 24/7 prequalification hotline at 504-399-4141 or our 24/7 application hotline at 504-332-0888.
About the author: Charles, Mortgage Loan Advisor with Max Mortgage, LLC. 20+ years in mortgage and real estate. NAMB Certified FHA Mortgage Professional.
Equal Housing Opportunity. This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states. Licensed in LA, TX, MS, AL, FL. Max Mortgage, LLC NMLS #1446745
