While national headlines focus on rising mortgage rates and slower builder activity, smart real estate investors are shifting toward single-family rental (SFR) properties in landlord-friendly states. These markets offer compelling opportunities for long-term, income-generating investments particularly when paired with DSCR loans (Debt Service Coverage Ratio loans), borrowers can qualify for using rental income instead of personal earnings.

This guide highlights long-term rental strategies and excludes short-term rentals or Airbnb models. The state rankings presented are based on median data and scoring formulas, they are not individualized investment recommendations.

All values are based on state-level median data, assuming a 20% down payment and a 30-year fixed mortgage with an interest rate range of 6% to 7.5%. Data sources include Zillow, Realtor.com, the Tax Foundation, and Insure.com. The weighing system for the data is based on a standardized score and given a score of either 0 or 1, where 1 represents the highest score and 0 is the lowest. We used inverted datasets, where the lowest number represents a high score, for Tenant Rent Burden and Tax & Insurance Burden.

• Net Monthly Revenue (40%): Rent minus PITIA (Principal, Interest, Taxes & Insurance)
• CAP Rate (30%): Annual Rent divided by Median Property Value
• Tenant Rent Burden (15%): Median Rent divided by Median Household Income
  •  Represents the share of income tenants spend on rent is generally more favorable for long-term rental demand
• Tax & Insurance Burden (15%): Combined state property tax rate and estimated homeowner insurance rate

The estimated revenue for the SFR dwelling ranges shown are based on median home values and rental data for each state. These figures aim to provide a general snapshot of investment potential and do not include additional costs like marketing, maintenance, property management, or vacancy loss.

To keep the data as consistent and comparable as possible across local markets, this analysis focuses specifically on single-family rental (SFR) on 2 bedroom properties. Investors may find significantly better, or worse, scenarios depending on the property and location.

• The lower value assumes a 7.5% interest rate and average insurance cost on the median home price
• The higher value assumes a 6.0% interest rate and the lowest insurance rate available for the same property

SFR rentals offer:

• Stable tenancy with long-term leases
• Simplified management over multifamily
• DSCR compatibility thanks to predictable income loan qualifications

With the right DSCR program, borrowers who qualify can close in an LLC, avoid personal income documentation, and scale quickly across top-performing states.

If your organization is a Real Estate Investment Trust (REIT), or provides real estate investing education in the state, reach out to us at marketing@newfi.com. Depending on availability, we’d love to consider adding your organization to our state links.

DSCR Loans in West Virginia

• Median 2BR Home Price: $113,899
• Median 2BR Rent: $981/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $672 – $805
  • Includes Estimated Taxes & Insurance: 1.3% – 1.8% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $176 – $309
• CAP Rate: 10.34%
• Tenant Rent Burden: 20.15%

West Virginia tops our list due to it’s combination of affordability and profitability. Low property costs paired with solid rent performance create outstanding cash flow conditions. West Virginia may be especially attractive for buy-and-hold investors using DSCR loans.

State Links: West Virginia Real Estate Investors, WV Housing Trends , WV Homes For Sale

• Median 2BR Home Price: $133,076
• Median 2BR Rent: $1,174/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $785 – $1,041
  • Includes Estimated Taxes & Insurance:1.3% – 2.7% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $133 – $389
• CAP Rate: 10.59%
• Tenant Rent Burden: 24.26%

Louisiana combines strong rent potential with moderate home prices, resulting in one of the best monthly cash flow profiles in the country. It’s a compelling choice for investors prioritizing net returns with DSCR financing.

State Links: Louisiana Market Overview, Louisiana Investment Guide, Facebook Louisiana Real Estate Investing Group

• Median 2BR Home Price: $126,254
• Median 2BR Rent: $1,078/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $810 – $988
  • Includes Estimated Taxes & Insurance: 1.9% – 2.7% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $90 – $268
• CAP Rate: 10.25%
• Tenant Rent Burden: 23.51%

Mississippi continues to fly under the radar. This state delivers strong rental yields for real estate investors using DSCR loans. Lower taxes and stable rent trends support long-term investment success.

State Links: Invest in Mississippi Real Estate, Mississippi Homes For Sale, Mississippi Investor Group

• Median 2BR Home Price: $111,595
• Median 2BR Rent: $1,079/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $844 – $1,066
  • Includes Estimated Taxes & Insurance: 3.3% – 4.8% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $13 – $235
• CAP Rate: 11.60%
• Tenant Rent Burden: 20.47%

Oklahoma offers the highest CAP rate in the country, paired with affordable property prices and stable rental income. While taxes and insurance run higher compared to other states, the numbers still favor strong positive cash flow for the right property.

State Links: Oklahoma Investor Group, Oklahoma Local Investor Blog, Oklahoma Investment Strategies

• Median 2BR Home Price: $290,322
• Median 2BR Rent: $2,039/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,703 – $1,985
  • Includes Estimated Taxes & Insurance: 1.3% – 1.5% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $54 – $336
• CAP Rate: 8.43%
• Tenant Rent Burden: 25.13%

Maryland has a high-income tenant base and strong rent performance. With modest property taxes and solid CAP rates, it remains a competitive market for DSCR Investors looking for long-term rentals.

State Links: Southern Maryland Rental And Vacation Opportunities, Maryland Investor Network Group, Mid-Atlantic Investor Association Group Upcoming Events

• Median 2BR Home Price: $129,062
• Median 2BR Rent: $1,082/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $943 – $1,153
  • Includes Estimated Taxes & Insurance: 3% – 4% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $-71 – $139
• CAP Rate: 10.06%
• Tenant Rent Burden: 18.21%

Kansas combines reasonable home prices with steady rent growth and manageable tenant rent burdens. Even with slightly tighter margins, DSCR investors benefit from consistent demand in suburban markets and strong landlord protections.

State Links: Kansas Investor Group, Kansas Upcoming Real Estate Investments, Starting an Investment Portfolio in Wichita KS

• Median 2BR Home Price: $162,928
• Median 2BR Rent: $1,139/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $972 – $1,209
  • Includes Estimated Taxes & Insurance: 1.4% – 2.2% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $-70 – $167
• CAP Rate: 8.39%
• Tenant Rent Burden: 19.62%

Indiana offers consistent affordability with broad tenant demand, especially in urban and suburban rental corridors. DSCR investors can capitalize on the state’s balance of yield and low risk.

State Links: Indiana Investment Blog, Northwest Indiana Creative Investors Association, Indiana Homes For Sale

• Median 2BR Home Price: $186,868
• Median 2BR Rent: $1,503/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,315 – $1,503
  • Includes Estimated Taxes & Insurance: 2.7% – 2.9% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $0 – $188
• CAP Rate: 9.65%
• Tenant Rent Burden: 24.64%

Texas remains one of the most dynamic rental markets in the U.S., with demand driven by population growth and housing shortages. DSCR investors can benefit from strong rent performance but should budget carefully for taxes and insurance.

State Links: Texas STR Investing tips, Texas Real Estate Investing Community

• Median 2BR Home Price: $275,562
• Median 2BR Rent: $1,743/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,571 – $1,897
  • Includes Estimated Taxes & Insurance: 1.1% – 1.6% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(154) – $172
• CAP Rate: 7.59%
• Tenant Rent Burden: 23.46%

Virginia attracts DSCR investors seeking stable markets, particularly around D.C., Richmond, and Norfolk. With strong economic fundamentals and moderate rent burden, it supports long-term real estate strategies.

State Links: Department of Housing and Community Development, Real Estate at Virginia Tech

• Median 2BR Home Price: $161,775
• Median 2BR Rent: $1,063/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $970 – $1,153
  • Includes Estimated Taxes & Insurance: 1.4% – 1.8% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(90) – $93
• CAP Rate: 7.89%
• Tenant Rent Burden: 21.06%

Alabama’s low property taxes and affordable home values provide a cushion for investors, even when cash flow is thin. DSCR loans may be a good fit in Birmingham, Huntsville, and other growing metros with stable rent demand.

• Median 2BR Home Price: $230,062
• Median 2BR Rent: $1,530/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,372 – $1,581
  • Includes Estimated Taxes & Insurance: 1.4% – 1.5% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(51) – $158
• CAP Rate: 7.98%
• Tenant Rent Burden: 25.19%

Georgia continues to draw DSCR-backed investment due to its growing population, rising rents, and expanding suburban corridors. Areas like Atlanta and Savannah offer strong rental demand despite tight margins.

• Median 2BR Home Price: $167,205
• Median 2BR Rent: $1,149/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,087 – $1,268
  • Includes Estimated Taxes & Insurance:2% – 2.4% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(119) – $62
• CAP Rate: 8.25%
• Tenant Rent Burden: 20.13%

• Median 2BR Home Price: $209,878
• Median 2BR Rent: $1,421/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,311 – $1,541
  • Includes Estimated Taxes & Insurance: 1.7% – 2.1% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(120) – $110
• CAP Rate: 8.12%
• Tenant Rent Burden: 22.90%

With strong CAP rates and demand centers like Philadelphia and Pittsburgh, Pennsylvania attracts DSCR investors targeting urban and suburban rentals. Moderate affordability keeps opportunities open across multiple property types.

• Median 2BR Home Price: $158,137
• Median 2BR Rent: $1,027/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,014 – $1,215
  • Includes Estimated Taxes & Insurance: 1.9%-2.5% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(188) – $13
• CAP Rate: 7.79%
• Tenant Rent Burden: 16.85%

Iowa’s affordability and low tenant rent burden offer solid fundamentals for long-term investors. DSCR loans may be especially effective in college towns and growing suburbs where rental demand is steady and inventory is limited.

• Median 2BR Home Price: $271,355
• Median 2BR Rent: $1,647/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,496 – $1,746
  • Includes Estimated Taxes & Insurance: 0.86% – 1.01% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(99) – $151
• CAP Rate: 7.28%
• Tenant Rent Burden: 25.88%

Delaware’s small size and strategic East Coast location make it a consistent performer for buy-and-hold investors. DSCR loans help simplify financing for properties in markets like Dover and Wilmington.

• Median 2BR Home Price: $170,295
• Median 2BR Rent: $1,108/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,064 – $1,297
  • Includes Estimated Taxes & Insurance: 1.7% – 2.4% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(189) – $44
• CAP Rate: 7.81%
• Tenant Rent Burden: 19.55%

Missouri presents an accessible option for DSCR financing, particularly for investors seeking stable Midwestern markets. While cash flow may be tight, low entry costs and moderate taxes support long-term investment strategies.

• Median 2BR Home Price: $171,132
• Median 2BR Rent: $1,096/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,061 – $1,269
  • Includes Estimated Taxes & Insurance: 1.7% – 2.2% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(173) – $35
• CAP Rate: 7.69%
• Tenant Rent Burden: 20.93%

Kentucky gives real estate investors a lower-cost gateway into DSCR loans. Though immediate returns may be modest, steady rent growth and manageable tax rates suggest potential for long-term portfolio value.

• Median 2BR Home Price: $215,505
• Median 2BR Rent: $1,339/m
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,281 – $1,462
  • Includes Estimated Taxes & Insurance: 1.38% – 1.43% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(123) – $58
• CAP Rate: 7.46%
• Tenant Rent Burden: 24.76%

South Carolina’s growing metros, like Charleston and Greenville, continue to gain investor attention. DSCR loans offer flexibility in a market where rising rents are slowly closing the gap on housing costs.

• Median 2BR Home Price: $197,979
• Median 2BR Rent: $1,251/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,249 – $1,449
  • Includes Estimated Taxes & Insurance: 1.8% – 2.1% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(198) – $2
• CAP Rate: 7.58%
• Tenant Rent Burden: 21.74%

Michigan’s rental markets in cities, like Detroit and Grand Rapids, provide reliable demand and affordable entry points. While margins may be tight, DSCR loans help investors focus on cash-flowing properties without relying on W-2 income.

• Median 2BR Home Price: $230,724
• Median 2BR Rent: $1,389/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,323 – $1,655
  • Includes Estimated Taxes & Insurance: 0.62% – 1.28% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(266) – $66
• CAP Rate: 7.22%
• Tenant Rent Burden: 24.24%

North Carolina’s growing cities and population make it a popular destination for real estate investors. However, rising home values and insurance costs can put pressure on DSCR loan margins.

• Median 2BR Home Price: $262,412
• Median 2BR Rent: $1,526/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,558 – $1,809
  • Includes Estimated Taxes & Insurance: 1.4% – 1.6% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(283) – $(32)
• CAP Rate: 6.98%
• Tenant Rent Burden: 21.23%

Alaska’s strong income levels help support rental rates, but high insurance costs impact cash flow potential. Still, markets like Anchorage can offer DSCR opportunities with careful property selection.

• Median 2BR Home Price: $282,802
• Median 2BR Rent: $1,895/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,677-2,124
  • Includes Estimated Taxes & Insurance: 2.31% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(219) – $227
• CAP Rate: 8.09%
• Tenant Rent Burden: 32.85%

Florida presents one of the most challenging markets for DSCR investors due to its high insurance rates, which can quickly erode profitability. While strong rental demand supports elevated rent prices, cash flow margins remain tight unless exceptional deals can be found.

• Median 2BR Home Price: $163,064
• Median 2BR Rent: $976/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,060 – $1,261
  • Includes Estimated Taxes & Insurance: 2.0% – 2.6% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(84) – $(285)
• CAP Rate: 7.18%
• Tenant Rent Burden: 19.76%

While monthly returns may be tight, Arkansas appeals to DSCR investors due to its low home prices and below-average tax burden. It remains an affordable market for long-term rental strategies focused on appreciation.

• Median 2BR Home Price: $338,820
• Median 2BR Rent: $2,148/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $2,090 – $2,454
  • Includes Estimated Taxes & Insurance: 1.7 – 2% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $57 – $(306)
• CAP Rate: 7.61%
• Tenant Rent Burden: 31.80%

• Median 2BR Home Price: $245,821
• Median 2BR Rent: $1,357/mo
• Monthly 2BR Payment Range (30-Year Fixed, 20% Down): $1,456 – $1,730
  • Includes Estimated Taxes & Insurance: 1.35 – 1.73% of Median 2BR Home Price
• Estimated Monthly Revenue (After Mortgage, Taxes & Insurance): $(81) – $(355)
• CAP Rate: 6.71%
• Tenant Rent Burden: 24.76%