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Investor Yield Index
At a 6.80% 30-year rate, none of the 18 tracked metros clears the 1.2 DSCR most lenders require. Cleveland comes closest at 1.22. The Index ranks these markets from strongest to weakest cash flow, so you can see which are least far from breaking even. It blends cap rate (30%), gross yield (20%), DSCR (30%), and cash-on-cash (20%). See the methodology.
Why zero clear the line. At 6.80% financing with 25% down and a 40% expense load, rents in every tracked metro fall short of covering the mortgage. The cheaper Midwest and Southeast markets at the top of the list are closest, and a rate buydown or a larger down payment can push the strongest of them over 1.2.
| # | Metro | Median price | Rent/mo | Gross yield | Cap rate | DSCR | CoC | Index | Grade |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Cleveland, OH | $146,863 | $1,461 | 11.94% | 7.16% | 1.22 | 4.63% | 100 | A |
| 2 | Memphis, TN | $124,349 | $1,441 | 13.91% | 8.34% | 1.42 | 8.84% | 100 | A |
| 3 | Birmingham, AL | $122,274 | $1,448 | 14.21% | 8.53% | 1.45 | 9.50% | 100 | A |
| 4 | Chicago, IL | $226,376 | $2,266 | 12.01% | 7.21% | 1.23 | 4.78% | 100 | A |
| 5 | Tampa, FL | $236,141 | $2,018 | 10.25% | 6.15% | 1.05 | 1.02% | 89 | A |
| 6 | Indianapolis, IN | $186,505 | $1,553 | 9.99% | 6.00% | 1.02 | 0.46% | 85 | A |
| 7 | Kansas City, MO | $197,905 | $1,548 | 9.39% | 5.63% | 0.96 | -0.84% | 68 | A |
| 8 | Houston, TX | $209,756 | $1,639 | 9.38% | 5.63% | 0.96 | -0.86% | 68 | A |
| 9 | San Antonio, TX | $183,620 | $1,404 | 9.18% | 5.51% | 0.94 | -1.29% | 62 | A |
| 10 | Columbus, OH | $204,904 | $1,524 | 8.93% | 5.36% | 0.91 | -1.83% | 55 | B |
| 11 | Orlando, FL | $265,670 | $1,977 | 8.93% | 5.36% | 0.91 | -1.82% | 55 | B |
| 12 | Atlanta, GA | $257,196 | $1,840 | 8.58% | 5.15% | 0.88 | -2.56% | 46 | B |
| 13 | Charlotte, NC | $257,739 | $1,740 | 8.10% | 4.86% | 0.83 | -3.59% | 35 | C |
| 14 | Dallas, TX | $252,511 | $1,678 | 7.97% | 4.78% | 0.82 | -3.87% | 32 | C |
| 15 | Nashville, TN | $317,204 | $1,798 | 6.80% | 4.08% | 0.70 | -6.38% | 13 | D |
| 16 | Las Vegas, NV | $314,948 | $1,737 | 6.62% | 3.97% | 0.68 | -6.77% | 11 | D |
| 17 | Austin, TX | $303,942 | $1,635 | 6.46% | 3.87% | 0.66 | -7.12% | 9 | D |
| 18 | Phoenix, AZ | $330,995 | $1,742 | 6.32% | 3.79% | 0.65 | -7.42% | 7 | D |
Scores are model estimates from public home-value and rent data using fixed assumptions (25% down, 3% closing, 40% expense load, 30-year amortization at 6.80%). Live weekly feed. Not an appraisal or a loan offer.
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How to read the Index
Grades are relative. At today's rate the cheaper Midwest and Southern metros clear the lender DSCR line while the pricier metros run negative on cash-on-cash, so a high grade means stronger relative cash flow rather than guaranteed profit.
Grade A (60 and up)
The strongest cash-flow metros tracked, with DSCR near 1.0 and the smallest monthly shortfall. A modest rate buydown or extra down payment can tip these over the 1.2 line.
Grade B (42 to 59)
Solid relative cash flow. Needs a rate buydown or larger down payment to comfortably clear DSCR 1.2.
Grade C (25 to 41)
Marginal. Works only with aggressive assumptions, and reads better as an appreciation play than a cash-flow buy.
Grade D (under 25)
Deeply cash-flow-negative at prevailing rates. These are appreciation markets where rent does not come close to covering the debt.