Ignore best-places-to-invest lists. For a DSCR borrower there's exactly one question that matters: does the rent-to-price ratio support the coverage you need at today's rates?
Everything else is downstream of that.
The math that defines a DSCR market
At roughly 8% on a 30-year amortizing loan at 75% LTV, your PITIA lands near 0.72%–0.78% of purchase price per month, once taxes and insurance are included.
To hit 1.25x coverage, you need monthly rent of roughly 0.90%–0.98% of purchase price. To hit 1.10x, roughly 0.80%–0.86%.
That's the whole test. A $300,000 house needs about $2,700/month rent for a strong 1.25x file, or about $2,450 to clear 1.10x.
Run that against your market before you look at anything else. Most coastal metros fail it immediately — a $900,000 property renting for $4,200 is a 0.47% ratio, which is roughly 0.60x coverage. No structure fixes that.
Five markets that still clear the bar
Atlanta metro. Roughly 0.80%–0.95% depending on submarket. Deep rental demand, strong in-migration, functioning property management infrastructure. Property taxes are moderate. The outer counties clear more comfortably than the intown submarkets, where appreciation has compressed yields.
Memphis. The highest ratios on this list — commonly 1.0%+ — and correspondingly the most operationally demanding. Property class varies dramatically block to block, and the gap between a C+ street and a B− street is the gap between a functioning rental and a management problem. This is a market where boots on the ground genuinely matters.
Tampa. Roughly 0.75%–0.85%. Excellent demand fundamentals and population growth. The insurance problem is real — Florida homeowner premiums have risen sharply and insurance is now a large enough share of PITIA to move DSCR by 0.10x or more. Get a real quote before you model, not a percentage-of-value estimate.
Charlotte. Roughly 0.75%–0.85%. The most "institutional" market here — steady employment growth, professional management infrastructure, comparatively predictable. Lower yields than Memphis, and lower operational variance.
Jacksonville. Roughly 0.80%–0.90%. Similar profile to Tampa with somewhat better entry pricing. Same Florida insurance caveat applies.
The three things that break the ratio after you buy
1. Insurance. The most volatile line in PITIA right now, particularly in Florida and increasingly in parts of the Gulf and the Southeast. A premium that jumps from $1,500 to $3,400 at renewal adds $158/month to PITIA and can take a 1.20x property to 1.12x. Model insurance from an actual bound quote.
2. Property taxes resetting on sale. In many jurisdictions the assessment resets to purchase price when the property trades. The seller's current tax bill is not your tax bill. Underwriting off it is one of the most common modeling errors in this business, and it's always in the wrong direction.
3. New supply. Markets with heavy multifamily delivery see rent growth stall and concessions appear. That shows up in your renewal, not your first lease. Check permit and delivery pipelines before assuming rent growth.
What actually matters more than the market
Three things, and they're all within your control:
Submarket over metro. "Atlanta" isn't a market. It's forty submarkets with materially different ratios, tenant profiles, and management realities. The metro-level average tells you almost nothing about the specific street.
Property management. In a 0.9% ratio market, a manager who leases in 18 days instead of 45 is worth more than a 0.25% rate improvement. In an out-of-state purchase this is the single highest-leverage decision you make.
Entry price. Buying 8% under market does more for your coverage ratio than choosing a market with a 5% better rent-to-price ratio. Deal selection beats market selection, every time.
The honest caveat
These ratios move. Insurance is repricing, taxes reset, and rent growth in the Sunbelt has moderated from its 2021–2022 pace. Treat the figures above as a framework for how to evaluate a market, not as current quotes.
Before you buy anywhere: pull real rent comps on the specific address, get a bound insurance quote, confirm the post-sale tax assessment, and run DSCR at the rate you're actually quoted — not the rate you hope for.
The market gets you into the right neighborhood of returns. The specific deal decides whether you make money.
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