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Investor questions, answered plainly
The questions we hear most about DSCR loans, cap rate, and the Investor Yield Index, each answered in a sentence or two before the detail.
Heads up on the numbers. Home values and rents are live from Zillow public data, recomputed each week. The mortgage rate shown is a current market estimate. The tools and formulas are real, and the full math is on the methodology page.
Quick reference
| Metric | What it answers | Index weight |
|---|---|---|
| Cap rate | Unlevered yield, ignores your mortgage. Best for comparing deals. | 0.3 |
| Gross yield | Annual rent divided by price. A fast rent-to-price read. | 0.2 |
| DSCR | Does the rent cover the loan. Lenders want 1.2 or higher. | 0.3 |
| Cash-on-cash | Your real return after financing, on the cash you put in. | 0.2 |
These four blend into one 0 to 100 Investor Yield Index score per metro. At today's 6.80% rate none of the 18 tracked metros clear the 1.2 lender minimum, so the Index ranks which markets come closest. Cleveland, OH leads with a score of 100 and a DSCR near 1.22.
Answers in detail
Are the rates and Index scores on DSCRRadar live?
Mostly, yes. Home values and rents come live from Zillow public data and refresh every week, so the Index scores reflect real market figures across all 18 tracked metros. The 30-year mortgage rate is a current market estimate rather than a live feed, since that one piece needs an API key to wire up.
So the cash-flow rankings are real, not placeholder. Treat the mortgage rate as a close approximation, and run your own rate when you price a specific deal. The full method is on the methodology page.
Does the 1% rule still work in 2026?
Rarely. The 1% rule says monthly rent should be at least 1% of the purchase price, but high home prices and 6.8% mortgage rates mean few major markets meet it in 2026. It survives mainly in cheaper Midwest and Southern metros. Treat it as a 10-second filter, not a verdict. The rule ignores operating costs and the loan, so confirm any deal with cap rate, DSCR, and cash-on-cash before you act.
What does DSCR stand for and what does it mean?
DSCR stands for Debt Service Coverage Ratio. It is a rental property’s net operating income (NOI) divided by its annual debt service, meaning the mortgage payments. A DSCR of 1.20 means the NOI covers those payments with 20% to spare. Most lenders set 1.20 as the minimum for a DSCR loan. The catch in 2026 is that at a 6.8% rate, very few metros clear 1.20, so the ratio doubles as a quick test of whether a market truly pays for itself. Compute yours with the DSCR calculator.
What is a good cap rate for a rental property?
It depends on risk. In 2026, 5 to 7 percent is typical for solid single-family rentals, while 8 percent and up tends to show up in cheaper, higher-risk markets. A very high cap rate often signals more vacancy or rougher areas, so it is a warning as much as a reward. The better question is whether the cap rate pays you fairly for the risk, and whether it still leaves a positive cash-on-cash return once the loan is in the math. See the cap rate benchmarks.
What's the difference between cap rate and cash-on-cash return?
Cap rate ignores your mortgage. Cash-on-cash includes it. Cap rate (NOI divided by value) measures the property’s unfinanced yield and is best for comparing deals side by side. Cash-on-cash (annual cash flow divided by cash invested) measures your real return after the loan payment. At 2026 rates, a property can post a fine cap rate yet still hand you a negative cash-on-cash return. That gap is what the Investor Yield Index is built to show. The Index weights cap rate at 30 percent and cash-on-cash at 20 percent, so it rewards markets where both hold up.
Which U.S. markets still cash-flow for rentals in 2026?
At a 6.8% mortgage rate, true cash flow is hard to find everywhere, so the Investor Yield Index ranks the 18 tracked metros by which come closest rather than which clear the bar outright. The leaders tend to be lower-cost Midwest and Southern metros, places like Cleveland, Memphis, Birmingham, and Indianapolis, where rent-to-price ratios survive the financing. Expensive Sun Belt and coastal markets usually trade current cash flow for the bet on appreciation.