Where Do Rental Properties Still Cash-Flow in 2026?
Published June 19, 2026 · DSCRRadar
Here’s the honest headline from the Investor Yield Index. At today’s 30-year rate, none of the 18 metros we track clears the 1.2 DSCR that lenders want on a mid-tier median purchase. Not one. That’s not a failure of analysis, it’s the reality the analysis reveals.
Two caveats up front. The Index runs on live Zillow home-value and rent feeds and the Freddie Mac PMMS 30-year rate, so the numbers move weekly and every market page states the observation date. And the Index prices the mid-tier median, the middle third of each metro by value. Investors who do find cash flow are typically buying the entry tier, the bottom third, where the same rent carries a much smaller mortgage. Each market page now shows both bands side by side. Treat the scores as a relative ranking of cash-flow strength, not as quotes on a specific house.
Why it’s hard
For a rental to clear a 1.2 DSCR at today’s rates with 25% down and a 40% operating-expense load, you generally need a cap rate in the high single digits. Cap rates that high only exist where prices are low relative to rents, typically cheaper Midwest and Southern metros. Across the 18 tracked metros, mid-tier cap rates now run from under 3% at the expensive end to roughly 4.5% at the cheap end. That is the whole story in one line. Even the best of them sits well short of the high single digits the lender’s bar requires.
Where it comes closest
The markets that score highest on the Index share traits. Lower median prices, stable rents, and rent-to-price ratios that survive financing. Chicago, Memphis, Cleveland, Birmingham and Tampa lead the ranking, and the Investor Yield Index carries each one’s current DSCR and cash-on-cash. None of them covers the debt at the median price today, so the ranking is about which market asks the least of you, not which one pays you.
The lever that actually changes the answer is the purchase price. Drop from the mid-tier median to the entry tier and the same rent carries a far smaller mortgage, which is why the cash-flow buyers who are still transacting are shopping the bottom third. Every market page shows that comparison directly, with the caveat that Zillow publishes no tier-split rent index, so the entry-tier row applies metro-wide rent to a starter price and reads as an upper bound.
Where it doesn’t (but appreciation might)
Expensive Sun Belt and coastal markets such as Austin, Phoenix, and much of Florida and California score poorly on cash flow. Investors there are betting on appreciation and loan paydown, not monthly income. That can work, but it’s a different bet than cash-flow investing.
How to use this
Don’t chase the highest Index score blindly. The score weights cap rate and DSCR most heavily at 30% each, then gross yield and cash-on-cash at 20% each, so it rewards markets that pencil out after the mortgage, not just high headline yields. Use it to narrow the list, then run your specific deal through the calculator. The Index is a starting point, not a verdict. Your actual property, financing, and management decide the real return.
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