Interest Cost Ratio (ICR) is a measure of the cost of borrowing money to finance an investment property. It is calculated by dividing the annual
interest payments on the loan by the gross rent received from the property. A higher ICR indicates that a larger portion of the rent is going towards paying interest, leaving less money for the investor to cover other expenses, such as property taxes, insurance, and maintenance.
The ICR can be used to compare different
investment properties or to track the performance of a property over time. A lower ICR is generally considered to be more desirable, as it means that the investor is keeping more of the rent money and is therefore more likely to make a profit.