Market Data

The Best Cash-Flow Rental Markets in 2026

September 2026 · Compounding Estates · data as of 2026-09-14 · Zillow, Census & BLS

We ranked 4,787 U.S. cities on rental cash flow. The result comes with an uncomfortable catch: the highest-yielding markets are almost all shrinking. Here is what the data actually says, and the growing markets that still cash‑flow.

What “cash flow” means here

In this article, cash flow means the gross rental yield: a full year of Zillow’s typical rent (ZORI) divided by the typical home value (ZHVI). That is a different number from the site’s Cash Flow category score, which ranks an expense-adjusted yield and price-to-income as national percentiles (see the methodology). (For the cheaper end an investor actually shops, every city page also shows the bottom-tier price and its yield.) It is deliberately a gross figure: it does not subtract taxes, insurance, vacancy, or management. Those costs are real, but they vary property to property; as our own backtesting showed, the engineered “net” versions predicted future returns worse than the plain yield did. So we publish the honest, checkable number and let you subtract your own costs in the cash-flow calculator. Zillow doesn’t publish a rent series for every place, especially the smaller towns admitted once we lowered our population floor to 5,000; where it’s missing, we build the same ratio from Census ACS median rent and home value instead. Rows built that way are unmarked; rows on Zillow’s own data are marked ^Z below, and every city’s own page states which one it got.

The uncomfortable truth about raw yield

If you sort purely by yield, the top of the list mixes two different stories. Six of the twelve, Detroit, Gary, Muskegon Heights, Ecorse, Flint, and Youngstown, are the familiar one: Rust Belt manufacturing towns that have been shrinking for decades, where homes are cheap because demand is thin. The rest are much smaller places, mostly under 15,000 people, where prices are low the same way, with one exception: Fort Myers Beach, a Gulf Coast town of about 5,500, is anything but cheap. Its typical home runs about $494,000 and its typical rent over $8,000 a month, the highest reported rent on this whole list; a high price and an even higher rent land it here anyway. Raymondville tops it at a 23.5% gross yield, on a roughly $48,000 typical home in South Texas. We flag every one of these twelve in our own model: public data can’t verify a yield this high holds up net of collections, condition, capex, and liquidity. And 10 of these top 12 are losing population.

Population trend is the annualized change in the Census population estimate. A ▼ marks a shrinking market. Price/income is the typical home value over local median household income; it uses Zillow’s own home-value estimate whenever one exists, even on rows where the yield itself falls back to Census ACS. Cities marked ^Z have a Zillow rent series and a Zillow-sourced yield; the rest are too small for Zillow’s coverage and get the same ratio built from Census ACS medians instead.

The investable cash-flow list

Now apply the one filter that matters most for a buy-and-hold rental: is the place growing? Of the 4,787 ranked cities, 2,828 still have a rising population and positive job growth (a much larger, much more ordinary-looking pool, with a median yield of about 5.5%, close to the site-wide 5.8% once you're past the highest-yielding names). Rank that pool by cash flow and the top of it looks like this: the 25 highest-yielding growing markets below carry a median gross yield of 12.1%.

Gross yield is a year of typical rent divided by typical home value, so yield × home value ÷ 12 returns the rent shown, and home value ÷ local income is the price-to-income. Cities marked ^Z use Zillow’s own ZHVI/ZORI for that pair; the rest are too small for Zillow’s coverage and use the matching Census ACS medians instead, so the reconciliation still holds within each row, just on a different source. Grade is our overall market grade (thirteen factors across cash flow, growth, and stability). Ranked by gross yield among growing markets (population growth ≥ 0 and job growth ≥ 0); 51 of the top 100 such markets carry an A grade. Each city links to its full page, where you can also see the cheaper bottom-tier “investor-entry” price and yield.

Where the cash flow is concentrated

The growing cash-flow markets cluster, and the pattern is stable across the top 100: TX (28), FL (14), PA (12), NJ (7), OK (7) lead the field. It is the Sun Belt for scale (Texas and Florida alone are 42 of the 100) plus a run of small, cheap towns in Pennsylvania and New Jersey. It is not the coasts, where a 3–4% yield is the ceiling no matter how nice the growth story.

How to use this list

• Treat it as a shortlist, not a verdict. A city clearing our screen means the fundamentals point the right way, not that a specific house pencils. Underwrite the actual deal.
• Subtract your real costs. Drop the home value and rent into the rental cash-flow & DSCR calculator with honest taxes, insurance, and vacancy. A gross yield is where the analysis starts, not where it ends.
• Check the whole city page. Every market above links to its current page, where crime, vacancy, unemployment, and rent growth are shown with their sources. None of them is in the gross-yield ranking above, but all four feed the market’s overall grade, and each page tags the score category every one of them counts toward.
• Compare against the boring alternative. Run the same down payment through the investment growth calculator. A rental that can’t beat an index fund needs a reason you actually believe.

Methodology & honest limits

We hold ourselves to one rule: every number is traceable to its source, and we’d rather state a gap than paper over it. In that spirit:

• Sources. Home values and rents from Zillow Research (ZHVI home values, ZORI rents); population and income from the U.S. Census (ACS 5-year, PEP); jobs from BLS LAUS. Data as of 2026-09-14.
• Gross, not net. Yields here do not subtract operating costs. That is a feature (the net-cost stack we tested added noise, not signal), but it means the headline yield overstates what lands in your pocket.
• Rent coverage is partial. Zillow’s rent index covers 3,415 of our 5,233 published cities today (about 3,388 of 5,214 at this snapshot) and skews toward larger markets. Smaller towns without a Zillow rent series still get ranked; they use the same ratio built from Census ACS medians instead (marked on the tables above and on each affected city’s own page).
• Rent and value aren’t a matched pair. The typical rent and typical home value are area-wide medians across all homes, not a specific listing and lease on the same property; a real deal will differ.
• Extreme yields are flagged, not hidden. Where a city’s reported gross yield is a statistical outlier, we flag it on its own page rather than excluding it: public data can’t fully verify a yield that high holds up net of collections, condition, capex, and liquidity.
• One regime. Our backtests cover 2019–2026, which includes a once-in-a-generation boom. Cheap, high-yield markets led that run; whether they lead the next one is unknown. Treat the ranking as a relative grade, not a forecast of a return.

The full model (and the factors we tested and rejected) is written up on the markets methodology page.

Citing this research

You're welcome to cite the aggregate findings above (the 4,787-city ranking, the 5.8% median yield, the shrinking-city concentration at the top of the raw list, the 2,828-city growing-and-employed pool) with attribution. A few things not to cite it for: it is not a return forecast (see "one regime" above), the headline yields are gross, not net of costs, and rent coverage is partial for smaller towns. The underlying per-city Zillow/Census/BLS source data is third-party research data, not something we redistribute: cite our published findings and methodology, not row-level figures we haven't published as a downloadable dataset.