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 the prevailing 2026 30-year rate near 6.8%, most of the 18 metros we track come up short of the 1.2 DSCR that lenders want. That’s not a failure of analysis, it’s the reality the analysis reveals.

One caveat up front. The Index runs on live Zillow public data, not a live MLS feed, so 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 a rate near 6.8% 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. At today’s rates only a handful of the tracked metros come close.

Where it still works

The markets that score highest on the Index tend to share traits. Lower median prices, stable rents, and rent-to-price ratios that survive financing. Think Cleveland, Memphis, Birmingham, Indianapolis, and similar secondary markets. They trade cash flow for slower appreciation.

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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