{"id":188735,"date":"2026-07-21T09:14:43","date_gmt":"2026-07-21T15:14:43","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=188735"},"modified":"2026-07-21T09:21:16","modified_gmt":"2026-07-21T15:21:16","slug":"rent-to-payment-report-summer-2026","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/rent-to-payment-report-summer-2026","title":{"rendered":"The Summer 2026 Rent-to-Payment Report: Where You Can Still Cash Flow With Real Estate"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Foreword by Dave Meyer<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In a new era of real estate investing, the old rules of thumb no longer work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Back in the day of cheap homes and high rents, you could confidently use rent-to-price ratios (one month of rent divided by the purchase price) to estimate cash flow. If you hit the magical 1% target for rent-to-price or at least got close to it, you were good to go.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unfortunately, in today\u2019s era of higher interest rates, insurance costs, taxes, and pretty much higher everything, those metrics no longer cut it. We need new metrics to identify good deals, so I created one and ranked the largest U.S. cities by it. I\u2019m calling it the Rent-to-Payment Ratio, and the formula is to divide one month&#8217;s rent by one month&#8217;s total mortgage payment (principal, interest, taxes, and insurance, aka PITI).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By comparing your total payment rather than purchase price, you better account for interest rate changes and how much insurance costs and taxes vary by state.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After ranking every metro by rent-to-payment, we can establish new benchmarks for cash flow estimates here in 2026, and the gold standard is still around 1.0. Anything that hits 1.0 or higher should have strong cash flow, but 1.0 is not some magical number.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to my analyses, anything with a rent-to-payment ratio of 0.75 or above should still offer cash flow opportunities, and any market with a rent-to-payment ratio below that number will make cash flow difficult but not impossible to find.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The rankings are meant to identify cash flow potential but should not be seen as the be-all and end-all&nbsp;of cash flow evaluation. Remember that even in a city that averages 0.6 rent-to-payment, by rule, half the properties still have a rent-to-payment above that number!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These are averages on a metro level, not an evaluation of individual properties. It\u2019s your job as an investor, no matter the market, to find deals that exceed those averages whenever possible.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One other reminder: Rent-to-payment ratios, my ranks, or any other rules of thumb are not meant as proper deal analyses. These are tools to help you narrow down your potential markets or deals. You still need to run a proper analysis before buying anything, which you can do with the <a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/investment-calculators\" target=\"_blank\" rel=\"noopener\">BiggerPockets calculators.<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">All that being said, I find these results encouraging! There are multiple cities in the U.S. with rent-to-payment ratios above 1.0\u2014which is great\u2014and plenty of others with strong income potential for investors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, get to it! Take a look at the list, find some great cash-flowing markets, and then get out there and find a deal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8211; Dave Meyer, Chief Investment Officer at BiggerPockets<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The New Benchmark: Cash Flow Is Not a Default\u2014It Needs to Be Discovered<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Across the 54 tracked metros, the average rent-to-payment ratio is roughly 0.80, with a median of 0.76, meaning that in the \u201ctypical\u201d big-city deal, market rent covers only 76%-80% of the full monthly cost of ownership (PITI).<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">A ratio of 1.0 used to be standard. Now it is the gold standard\u2014where rent covers principal, interest, taxes, and insurance\u2014while 0.75-1.0 remains workable, and anything below 0.75 is an uphill struggle for cash flow that will require either below-market house pricing, above-market rents, or aggressive value-adds to boost rents, which will cost investors.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For sophisticated investors, the hunt is framed not in terms of cash flow but rather in which metros the deal averages close to break-even and where they can use their skills in sourcing, underwriting, and value-add to move the needle.<\/span><\/p>\n\n\n<p><iframe src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2026\/07\/1_distribution.html\"     width=\"100%\" height=\"609\" style=\"border:0\" loading=\"lazy\" title=\"Where the 54 metros land in 2026\"><\/iframe><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Where Cash Flow Lives: Midwest and Northeast Workhorses<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">A pattern exists in many of the \u201ccash-flow metros\u201d: Home prices stayed cheap, while rents either held up or reset higher as national affordability shrank.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">At the top of the table, Detroit posts an impressive rent-payment ratio of 1.99, meaning that average market rent is almost double the modeled all-in monthly cost of owning a city-limit property.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Here\u2019s the full top 10, clustered around break-even stats:<\/span><\/p>\n\n\n<p><iframe src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2026\/07\/2_top10.html\"            width=\"100%\" height=\"649\" style=\"border:0\" loading=\"lazy\" title=\"Top 10 cash-flow metros\"><\/iframe><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Home Values<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Detroit has an average home value of about $72,000. However, with a $1,280 monthly rent and modest principal-and-interest payments, along with relatively low taxes and insurance, there is a wide net operating income margin even after expenses. <\/span><span data-preserver-spaces=\"true\">For an investor, the gap between rent and PITI <\/span><span data-preserver-spaces=\"true\">is<\/span><span data-preserver-spaces=\"true\"> a buffer against vacancy, capital expenditures, and future tax rate <\/span><span data-preserver-spaces=\"true\">increases<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Midwest markets such as Cleveland, St. Louis, Cincinnati, Indianapolis, Columbus, Chicago, and Kansas City all sit in the workable range\u2014typically between 0.81 and 1.19\u2014with taxes and insurance high enough to make a difference but not so high as to cripple the payment. <\/span><span data-preserver-spaces=\"true\">In these cities, underwriting will depend more on rental amounts, tenant quality, and neighborhood selection than on whether <\/span><span data-preserver-spaces=\"true\">PITI has surpassed the rent ceiling.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What the Data Doesn\u2019t Tell You<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">What the data doesn\u2019t tell you is what kind of house you are getting for under $80,000 in Detroit\u2014or in any city\u2014and in what neighborhood. Theoretical cash flow is one thing, but real-world experience, factoring in crime and socioeconomic conditions, also plays a part and can devour profit in an instant.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This is where microdata and experienced, trustworthy partners\/agents and brokers are essential. Cash flow on paper doesn\u2019t always translate in real life, so don\u2019t take the data as sacrosanct. This is a general overview. Always do your due diligence.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">At the Tough End: When Cash Flow Is a Nonstarter<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">At the bottom of the list, high prices, not weak rents, drive down the ratios<\/span><span data-preserver-spaces=\"true\">.<\/span> <span data-preserver-spaces=\"true\">San Jose, with a rent-to-payment ratio near 0.39; San Francisco at 0.52; Los Angeles at 0.49; Seattle at 0.49; and San Diego at 0.56 all show strong rents\u2014but their home values and resulting PITI <\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\"> outpace what tenants can reasonably be expected to pay.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Austin\u2014once a pandemic-era hotbed\u2014has joined these low-ratio ranks, with a rent-to-payment ratio of about 0.40, as prices have reset only partially and rents have softened.<\/span><\/p>\n\n\n<p><iframe src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2026\/07\/3_bottom10.html\"         width=\"100%\" height=\"649\" style=\"border:0\" loading=\"lazy\" title=\"The 10 toughest cash-flow metros\"><\/iframe><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In these pricey metros, investors are buying for appreciation and as a safe place to park cash. Thus, buying all cash here is the practical way to go, unless you are an owner-occupant and can cover the mortgage payment. <\/span><span data-preserver-spaces=\"true\">The only other option is a value-add scenario\u2014adding bedrooms or ADUs\u2014to bring cash flow to a break-even point<\/span><span data-preserver-spaces=\"true\">&nbsp;or to flip.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In the modern investment era, price is not everything. Taxes and insurance have soared in recent years, so much so that they can derail what would once have been a perfectly good deal, cost-wise. This is no more evident than in Oklahoma City, where the rent-to-payment ratio of 0.56 is so low in part because homeowner\u2019s insurance alone accounts for roughly 40% of PITI, making it one of the highest shares in the country.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In Houston, Miami, Dallas, and other cities vulnerable to extreme weather\u2014particularly storms and hail\u2014elevated insurance and property tax costs significantly constrain the spread<\/span><span data-preserver-spaces=\"true\">, submerging cash flow uncertainty under the weight of high expenses.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Regional Divide: Why The Midwest Wins\u2014on Average<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">One underlying theme is unmistakable from the data: The Midwest is the only region that cash flows, posting a mean rent-to-payment ratio of about 1.01\u2014just above break-even. The Northeast follows at roughly 0.89, the South at 0.78, and the West lags far behind at 0.61. This means that in major western metros, the typical deal is nearly 40% underwater on PITI\u2014even before maintenance and reserves are factored in.<\/span><\/p>\n\n\n<p><iframe src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2026\/07\/4_regions.html\"          width=\"100%\" height=\"560\" style=\"border:0\" loading=\"lazy\" title=\"Average ratio by region\"><\/iframe><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For investors, these regional demarcations clearly have major implications:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Midwest: <\/span><\/strong><span data-preserver-spaces=\"true\">Investors need to drill down to examine submarkets, and sometimes specific streets, property types, and investment strategies,<\/span><span data-preserver-spaces=\"true\">&nbsp;to maximize durable, scalable cash flow from a generally favorable dataset.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Northeast: <\/span><\/strong><span data-preserver-spaces=\"true\">With robust, populous, high-demand cities like New York, Boston, and Philadelphia, the trade-off is lower ratios for tenant demand and tight supply, with most cash flow and stable appreciation.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">South: <\/span><\/strong><span data-preserver-spaces=\"true\">The map is uneven, with unglamorous, blue-collar cities such as Memphis and Birmingham giving off strong cash flow. <\/span><span data-preserver-spaces=\"true\">Conversely, more upscale cities with modern businesses, like Austin, Atlanta, Nashville, Tampa, and Houston, are too pricey\u2014like California cities\u2014to generate any cash flow from<\/span><span data-preserver-spaces=\"true\">&nbsp;rents.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">West: <\/span><\/strong><span data-preserver-spaces=\"true\">It\u2019s good for parking cash and long-term appreciation, but cash flow, with leveraged debt, is a nonstarter.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Payment Beats Price: Underwriting in a High-Cost World<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In 2026, a key shift in professional underwriting has been long overdue\u2014because rent-to-price ratios are no longer enough. Taxes and insurance, as we have seen, often constitute a large chunk of an investor\u2019s expenses. By calculating monthly rent-to-payment ratios using the full monthly PITI at 6.5%, a 30-year fixed rate, and a 20% down payment\u2014including city-level taxes and insurance\u2014the dataset captures the true exposure for investors when rates and non-loan costs spike.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The impact is most dramatic when taxes and insurance deviate wildly from national norms. We already looked at Oklahoma City, where insurance is 40% of the payment. In Houston and Miami, high wind and flood risks have driven up annual premiums to an average of $7,860 and $6,000, respectively. Conversely, in places like Birmingham and Indianapolis, very low effective tax rates and moderate insurance keep PITI in check, allowing rent to absorb more of the costs.<\/span><\/p>\n\n\n<p><iframe src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2026\/07\/5_piti_composition.html\" width=\"100%\" height=\"609\" style=\"border:0\" loading=\"lazy\" title=\"The impact of PITI\"><\/iframe><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For a sophisticated investor, a correlation between your payment composition and your market selection is essential<\/span><span data-preserver-spaces=\"true\">&nbsp;if cash flow is your ultimate goal. There\u2019s more to it, however. Looking at the overall picture holistically, there needs to be an equilibrium between price and non-mortgage-related costs.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Try to select markets where taxes and insurance have scaled reasonably with price, leaving room for rent growth to translate into cash flow. Equally, be wary of markets where policy or climate risk has inflated non-loan costs. In these instances, negotiating a great deal on price may not rescue a weak rent-to-payment ratio profile.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Investor\u2019s Lens: Using the Rankings to Deploy Capital<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you\u2019re building or expanding a portfolio in 2026, this dataset offers a practical investment roadmap but not a definitive guide, as prices and costs often vary by neighborhood.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">That said, certain guidelines are helpful:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Use high-ratio metros: <\/span><\/strong><span data-preserver-spaces=\"true\">Detroit, Cleveland, Memphis, Birmingham, Hartford, St. Louis, and their peers are primary cash flow-hunting grounds.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Treat mid-range metros: <\/span><\/strong><span data-preserver-spaces=\"true\">Many in the Northeast and interior South are balanced plays, where cash flow exists, but you are more likely to find a mix of modest cash flow and appreciation.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Approach low-ratio metros such as Austin and West Coast cities as specialty markets: <\/span><\/strong><span data-preserver-spaces=\"true\">These are places where short-term rentals or cash purchases are for long-term equity appreciation and tax write-offs.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The optimistic note here is that even at 6.5% interest, high prices, and soaring taxes and insurance in many markets, there are large swathes of the U.S. where cash flow\u2014or at least breaking even\u2014has not disappeared. By using this rent-to-payment guide, you have a realistic tool that is not built on real estate agent or wholesaler hype or misdirection but on concrete numbers that even the playing field.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">It\u2019s a good first step\u2014there are many more to take\u2014but at least you\u2019re facing in the right direction.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Editor\u2019s Note:&nbsp;<\/strong><em>Thanks for reading! As a special offer for our readers, save $100 on your ticket to&nbsp;<a class=\"underline underline underline-offset-2 decoration-1 decoration-current\/40 hover:decoration-current focus:decoration-current\" href=\"http:\/\/biggerpockets.com\/conference\" target=\"_blank\" rel=\"noopener\">BPCON2026<\/a>\u2014BiggerPockets\u2019 annual real estate investing conference\u2014using code&nbsp;<strong>MYRE100<\/strong>&nbsp;at checkout.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Foreword by Dave Meyer In a new era of real estate investing, the old rules of thumb no longer work. Back in the day of cheap homes and high rents, [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":188739,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-188735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=188735"}],"version-history":[{"count":3,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188735\/revisions"}],"predecessor-version":[{"id":188748,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188735\/revisions\/188748"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/188739"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=188735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=188735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=188735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}