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Investor Yield Index
At a 6.80% 30-year rate, 4 of the 18 tracked metros clear the 1.2 DSCR most lenders require, and 6 run a positive cash-on-cash return. Cleveland leads the Index at 100 with a 1.22 DSCR and 4.63% cash-on-cash. The cheaper Midwest and Southern metros cash-flow, the pricier coastal and Sun Belt metros do not. The Index blends cap rate (30%), gross yield (20%), DSCR (30%), and cash-on-cash (20%). See the methodology.
Where the line falls. At 6.80% financing with 25% down and a 40% expense load, the cheaper Midwest and Southern metros at the top of the list cover the mortgage and pay you back. Cleveland clears the lender line with a 1.22 DSCR and 4.63% cash-on-cash. The pricier coastal and Sun Belt metros lower down run a monthly shortfall, where a rate buydown or a larger down payment is what closes the gap.
| # | 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 |
Prices and rents come from live Zillow public home-value and rent feeds across 18 metros. Scores are model estimates using fixed assumptions (25% down, 3% closing, 40% expense load, 30-year amortization at the 6.80% prevailing 30-year rate, a current market estimate). 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 and pay positive cash-on-cash, while the pricier coastal and Sun Belt metros run negative, so a high grade points to stronger cash flow rather than guaranteed profit on any single deal.
Grade A (60 and up)
The strongest cash-flow metros tracked. The top of this band clears DSCR 1.2 and pays positive cash-on-cash today, like Cleveland at a 1.22 DSCR. The lower end sits just under the line and needs a small rate buydown or extra down payment to cross it.
Grade B (42 to 59)
Close, but a touch short. DSCR lands near 0.9, so it takes a rate buydown or a 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.