P-Insight · DSCR Geography · 2026-05-22

Where does rental cash flow actually cover debt service?

DSCR ≥ 1.0 means rent income exceeds all operating costs plus the mortgage payment — the property covers itself at 80% LTV and 7.21% rate. Across the 26,177 U.S. ZIP codes where we can compute DSCR, only 1,151 (4.4%) clear that bar. Here's where they are and why.

Finding

Cash-flowing rental ZIPs are concentrated in Appalachia, the Rust Belt, and the Deep South — markets where median home values sit below $100k while rents remain supported by local wages. West Virginia (113 ZIPs, 24% of its computable inventory), Kentucky (109 ZIPs, 18%), and Pennsylvania (110 ZIPs, 8%) lead the count. A separate cluster of vacation-rental ZIPs in the Hamptons, Fort Myers, and Kauai show DSCR ≥ 1.0 because Zillow ZORI captures short-term rental rates — a different investment thesis requiring active management.

DSCR ≥ 1.0 ZIPs

1,151

of 26,177 computable (4.4%)

Median home value

$97k

53% of ZIPs below $100k

Median gross yield

12.2%

vs ~5–7% in coastal metros

Median DSCR

1.28×

Median rent $1,017/mo

Home Value Distribution 1,151 DSCR ≥ 1.0 ZIPs

Cash flow at scale is almost exclusively a cheap-market phenomenon. 95% of DSCR ≥ 1.0 ZIPs have home values under $200k. Nine ZIPs above $500k are all vacation-rental markets (see Category 2 below).

<$100k

614

$100–200k

478

$200–300k

$300–500k

$500k+

Two Distinct Categories Different thesis, different risk

Category 1 — 1,130 ZIPs

Affordable markets: rent-ratio plays

Low home values relative to local rents — the structural cash-flow thesis. Concentrated in Appalachia (WV, KY, VA coalfields), Rust Belt (OH, MI, IL, PA), and the Deep South (AL, MS, LA, OK). Rents are supported by manufacturing, healthcare, government, and energy sectors; home prices never rose with coastal appreciation cycles.

Median home value$91k

Median DSCR1.28×

Median gross yield12.1%

Rent sourceZillow ZHVI / ACS / HUD FMR

Investment thesisLong-term tenancy, high yield, low entry

Key riskVacancy, exit liquidity, population decline

Category 2 — 21 ZIPs

Vacation rental markets: ZORI premium

High home values but DSCR ≥ 1.0 because Zillow ZORI captures short-term / seasonal pricing. Includes the Hamptons (NY 11977/11978, $1.4–1.6M homes, $24–29k/mo ZORI), Fort Myers Beach FL (33931, $495k home, $14.7k/mo ZORI, 7.5× HUD FMR), and Kauai HI (96722, $1.5M, $14k/mo). Long-term tenancy DSCR would be well below 1.0 at these home values.

Median home value$600k+

ZORI vs HUD FMR4–11× FMR

Rent sourceZillow ZORI (short-term / vacation rate)

Investment thesisActive vacation-rental management

Key riskRegulation, seasonality, platform dependency

By State — Top 25 DSCR ≥ 1.0 ZIP count, median metrics

West Virginia leads in absolute count (113) and market penetration (24% of its computable ZIPs). Kentucky shows the highest median DSCR (1.47×) among large states — the Appalachian rent-to-value ratio is the most favorable in the country. Florida's 34 ZIPs skew toward vacation-rental markets (median HV $200k reflects a mix of affordable inland + high-ZORI coastal ZIPs).

State	DSCR≥1 ZIPs	% of state	Med DSCR	Med home value	Med rent/mo

Top 30 — Highest DSCR Ranked by DSCR descending

The extreme values (DSCR > 4.0) are ultra-cheap markets where home values are under $90k but rents — often anchored by Section 8 / HUD vouchers or local employers — remain surprisingly firm. Dickenson County VA (24237, $38k home, $1,357 rent) is a coalfield community where housing is nearly free relative to income; McDowell County WV is similar. Fort Myers Beach FL (33931) is the only vacation-rental outlier in the top 30.

#	ZIP	St	County	DSCR	Home value	Rent/mo	Gross yield

Methodology & Caveats Know what this model is and isn't

Formula: DSCR = NOI / DebtService, where NOI = Rent × 12 × 0.89 − HV × OpCost and DebtService = HV × 0.80 × ANN. Rate = 6.51% (FRED MORTGAGE30US 2026-05-21) + 70bp DSCR spread = 7.21%. ANN = 0.081536 (30-yr monthly amortization constant). OpCost = per-state property tax + per-state DP-3 landlord insurance + real maintenance_pct. All constants match the WindMayor heatmap exactly.
Rate sensitivity: DSCR is computed at the current mortgage rate (7.21%). At 6.0% (ANN = 0.072), the DSCR≥1.0 universe would expand materially. At 8.0% (ANN = 0.089), it contracts. Use the heatmap rate slider to explore scenarios.
Rent source: Primary = Zillow ZHVI/ZORI where available; fallback = ACS B25064 median gross rent; secondary fallback = HUD FMR. ZORI captures active listing rents and can embed short-term / vacation pricing in resort markets — those ZIPs appear in Category 2.
Vacancy assumption: 11% vacancy/credit loss (89% collection factor) is a national average. Low-HV markets often run higher actual vacancy rates (15–25%), which would reduce real DSCR below the computed value. Treat DSCR = 1.05 as marginal; DSCR ≥ 1.3 as a meaningful buffer.
Coverage: 26,177 of 31,646 ZIPs have sufficient data for DSCR computation (82.7% ZHVI coverage; ZIPs with no home-value data cannot be scored). Puerto Rico and some rural territories are excluded. The 1,151 positive ZIPs represent 4.4% of scored ZIPs, not 4.4% of all U.S. ZIPs.
This is not investment advice. DSCR ≥ 1.0 is a necessary but not sufficient condition for a profitable rental investment. Exit liquidity, tenant quality, deferred maintenance, local rent regulation, and insurance availability all matter and are not captured here.