CapEx (Capital Expenditures)
Major non-recurring property expenses — roof, HVAC, water heater, plumbing replacement. Investors typically reserve $200–400/month/property for CapEx, separate from regular maintenance.
Why it matters on a DSCR loan
DSCR underwriting doesn't subtract a CapEx line item from your qualifying income, which means a deal can pass the lender's test while still being a poor investment once the roof and HVAC bills arrive. Build your own CapEx reserve into the deal analysis, especially on older properties where big-ticket systems are near end of life. Healthy liquid savings also help you satisfy lender reserve requirements at closing, so the same cushion serves two purposes.
Related terms
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DSCR Calculator Get a QuoteReviewed by Arin Baghermian, Broker Owner — NMLS #1220456 · Last reviewed July 2, 2026 · DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548).