The Best STR Markets for DSCR Borrowers in 2026. A 50-Market Data Analysis

Key West properties are averaging $143,417 in annual gross revenue per listing. That number, pulled from StaySTRA’s February 2026 dataset across 1,172 active Key West listings, represents the highest revenue ceiling in our entire 50-market database. Think of it like this: if DSCR qualification were a high-jump bar, Key West properties are clearing it with room to spare on the revenue side.

But revenue alone does not tell a DSCR lender what they need to hear.

I spent three weeks combing through StaySTRA’s full 50-market dataset to answer a question I keep getting from investors at conferences and in my inbox: Where should I buy if I want the easiest path to DSCR loan approval? The answer is more nuanced than “pick the market with the biggest revenue number.” It requires weighing gross income against acquisition costs, occupancy stability against seasonal swings, and raw cash flow against regulatory exposure that could clip your income mid-loan.

Here is what the data actually shows.

How DSCR Math Works (and Why It Matters for Market Selection)

Before we rank markets, let me make sure we are speaking the same language. A DSCR loan qualifies based on the property’s income, not yours. The formula is straightforward:

DSCR = Annual Gross Rental Revenue / Annual PITIA

PITIA stands for principal, interest, taxes, insurance, and association dues. That is the total annual cost of carrying the property. Most lenders in 2026 want to see a minimum DSCR of 1.0, meaning the property’s rental income at least covers its carrying costs. A ratio of 1.25 or better unlocks the best rates and terms, because it tells the lender the property generates 25% more income than it costs to own.

Here is the practical translation. On a $500,000 property with 20% down ($400,000 loan at 7.5% over 30 years), your annual PITIA runs roughly $42,000 to $48,000 depending on your state’s tax rate and insurance premiums. To hit a 1.25 DSCR on that property, you need about $52,500 to $60,000 in annual gross revenue.

That is the lens I used for every market in this analysis. Not just “how much does it earn?” but “how much does it earn relative to what it costs to buy and hold?”

The Top 10 STR Markets for DSCR Borrowers

Ranked by average annual gross revenue per property, using StaySTRA data from February 2026. I have included occupancy rate and ADR to show what is driving the revenue in each market.

Source: StaySTRA market data, February 2026. Revenue figures represent average monthly revenue per active listing, annualized.

Every market in the top 10 clears $65,000 in annual gross revenue. That is the number I want you to hold in your head, because on a $400,000 to $550,000 acquisition (with 20% down at 7.5%), $65,000 in gross revenue puts your DSCR comfortably above 1.25.

Now let me explain what these numbers mean in practice, because the top line hides some important distinctions.

The Revenue Giants: Markets That Make DSCR Qualification Easy

The top three markets in our dataset produce truly exceptional gross revenue. Key West ($143,417), Park City ($124,979), and Scottsdale ($102,072) are in a class of their own. If you are buying in any of these markets, your DSCR numerator is rarely the problem.

The catch? Your denominator might be.

Key West’s median sale price sits around $1.15 million as of early 2026. Park City single-family homes carry a median above $3.5 million (condos around $1.1 million). Scottsdale’s median has climbed past $900,000. These elevated acquisition costs mean larger loans, higher PITIA, and the revenue advantage gets partially consumed by the debt service.

Take Key West as an example. On a $1.15 million purchase with 20% down ($920,000 loan at 7.5%), your annual PITIA lands somewhere around $90,000 to $100,000 once you factor in Florida property taxes and coastal insurance premiums. Even with $143,417 in gross revenue, your DSCR comes in around 1.43 to 1.59. Strong, but not the blowout the revenue number alone might suggest.

Park City is even trickier. At $3.5 million, most DSCR lenders cap loan amounts well below what you would need, and condos at $1.1 million still carry hefty HOA dues that inflate the “A” in PITIA. Park City is a phenomenal STR revenue market. It is a challenging DSCR market for anyone who is not bringing significant cash to closing.

The Sweet Spot: Strong Revenue, Moderate Acquisition Costs

This is where DSCR borrowers should focus their attention. The markets that make DSCR qualification easiest are not necessarily the ones with the highest revenue. They are the ones where revenue runs well ahead of carrying costs.

I ran the numbers on implied gross yield (annual gross revenue divided by a typical acquisition price) across all 50 markets. These stood out:

Bradenton, FL

StaySTRA data shows $68,926 in average annual gross revenue with 48% occupancy and a $407 ADR. Median home prices in the Bradenton-Sarasota corridor run in the $450,000 to $500,000 range. That puts your implied gross yield above 14%. On a $475,000 purchase with 20% down, your PITIA runs roughly $40,000 to $44,000 annually. A DSCR above 1.55? That is the kind of number that makes lenders smile.

Bradenton also benefits from its proximity to Sarasota and Anna Maria Island without carrying the premium price tags of either. Regulatory exposure is moderate. Florida has been historically friendly to STR operators at the state level, though local ordinances vary.

Phoenix, AZ

At $65,217 in annual gross revenue with 52% occupancy (the highest in the top 10, tied with Scottsdale), Phoenix offers the most consistent booking pattern in this group. Median home prices have softened slightly, sitting around $430,000 to $460,000. That generates an implied gross yield near 14.5%.

Phoenix’s regulatory environment deserves a note. Arizona has historically been one of the most STR-friendly states through its preemption law, which prevented cities from banning short-term rentals outright. That preemption is now under legislative pressure. If it weakens, individual cities could impose restrictions that would directly affect your DSCR numerator. Watch this one carefully.

New Orleans, LA

New Orleans produces $66,680 in annual gross revenue at $472 ADR across 5,384 listings. Acquisition costs are among the most favorable in the top 10, with median prices in the $325,000 to $375,000 range depending on neighborhood. That implies a gross yield approaching 19%, the highest ratio in our dataset.

Stay with me here, because New Orleans also carries some of the highest regulatory risk in our 50-market universe. The city operates one of the most active STR enforcement programs in the country. License caps, residential zone restrictions, and periodic crackdowns create income uncertainty that DSCR lenders should factor into conservative projections.

Joshua Tree, CA

StaySTRA data shows $56,789 in annual gross revenue from just 1,237 active listings. Occupancy runs at 50%, and the ADR of $338 reflects the desert market’s appeal to weekend travelers from Los Angeles. With acquisition prices typically in the $350,000 to $450,000 range, Joshua Tree delivers one of the better revenue-to-price ratios in California.

San Bernardino County has tightened STR rules in recent years, but Joshua Tree itself remains a viable STR market. The limited listing count (1,237 compared to Phoenix’s 6,359) means supply is naturally constrained, which supports both occupancy and pricing power.

Kissimmee, FL

The Orlando-Kissimmee corridor generates $46,286 in annual gross revenue per listing at $308 ADR. That might look modest compared to the top 5, but Kissimmee’s acquisition costs are among the lowest in any major STR market. Properties purpose-built for vacation rental use in resort communities can be found in the $350,000 to $425,000 range. DSCR ratios above 1.25 are achievable here with careful property selection.

What makes Kissimmee distinctive for DSCR borrowers is its 10,143 active listings, the largest supply pool in our dataset. That volume gives lenders confidence that the market is established, with readily available comp data for appraisals. If your DSCR lender needs to value a vacation rental property, Kissimmee has more comparable sales than anywhere else.

Mountain vs. Coastal vs. Urban: A DSCR Breakdown

After 40 years of looking at data, I have learned that categorizing markets by geography tells you something about their DSCR personality that raw numbers alone can miss.

Mountain Markets

Park City, Mammoth Lakes, Lake Tahoe, Sedona, Big Bear Lake, Blue Ridge, Gatlinburg, and Asheville. These markets dominate the upper end of our ADR rankings. Park City at $986 per night and Mammoth Lakes at $584 per night reflect the premium travelers pay for ski access and alpine scenery. Annual gross revenue in this group ranges from $27,000 (Asheville) to $125,000 (Park City).

The DSCR challenge here is occupancy volatility. Park City runs at 39%, Lake Tahoe at 38%, and Blue Ridge at 34%. These markets have sharp seasonal peaks (ski season, fall foliage) and pronounced troughs. A lender underwriting a DSCR loan will want to see that your revenue projection accounts for those empty weeks, not just the peak-season bonanza.

The mountain market that best balances revenue and DSCR practicality? Sedona, AZ. At $71,210 in annual revenue, 49% occupancy, and acquisition prices typically in the $550,000 to $700,000 range, Sedona offers a DSCR-viable path without Park City’s seven-figure entry ticket.

Coastal Markets

Key West, Bradenton, Sarasota, Destin, Gulf Shores, Panama City Beach, Myrtle Beach, and the Outer Banks. This group represents the broadest revenue range in our dataset. Key West at $143,417 and Myrtle Beach at $19,243 sit in the same geographic category but in entirely different DSCR universes.

The Gulf Coast corridor from Bradenton through Destin offers the most DSCR-friendly coastal opportunities. Properties here generate $41,000 to $69,000 in annual revenue at acquisition costs generally below $600,000. Insurance premiums are the variable to watch. Coastal Florida and Alabama properties carry hurricane and flood insurance costs that can add $5,000 to $15,000 per year to your PITIA, compressing DSCR ratios that look great on paper.

I always tell investors to get an actual insurance quote before they finalize DSCR projections on any coastal property. The “I” in PITIA can surprise you.

Urban Markets

Phoenix, Nashville, Austin, San Antonio, Las Vegas, Denver, Dallas, and Houston. Urban markets tend to produce moderate gross revenue ($25,000 to $65,000 range) with higher occupancy consistency. Phoenix leads this group at $65,217 and 52% occupancy. Austin ($35,561, 38%), Nashville ($42,138, 39%), and Las Vegas ($32,989, 36%) all fall in a band where DSCR qualification depends heavily on acquisition price.

The urban advantage for DSCR borrowers is stability. These markets have diversified demand sources (business travel, events, tourism, relocations), which smooths out revenue volatility. A lender underwriting a Nashville STR knows that demand does not vanish when ski season ends or when summer crowds go home.

The urban disadvantage: regulatory complexity. Nashville, Austin, and Dallas have all implemented or attempted STR restrictions in recent years. Dallas is currently asking the Texas Supreme Court to enforce its STR ban before the 2026 FIFA World Cup.

The Regulatory Risk Factor: Markets That Look Great on Paper

A DSCR loan is typically a 30-year commitment. That means your property needs to generate qualifying revenue not just today, but for years to come. Regulatory risk is the factor most DSCR analyses ignore, and it is the one that can turn a 1.4 DSCR into a 0.7 overnight.

Here are the markets in our dataset with elevated regulatory exposure:

Miami, FL ($53,533 annual revenue, 49% occupancy): Miami Beach has implemented aggressive enforcement with daily fines for unlicensed operators. The broader Miami-Dade market remains viable, but zoning restrictions vary block by block. Lenders increasingly ask for documentation of STR licensing in Miami.

New Orleans, LA ($66,680 annual revenue, 43% occupancy): Strong revenue, but the city operates one of the most active STR enforcement programs in the country. License caps, residential zone restrictions, and periodic crackdowns create income uncertainty that DSCR lenders should factor into conservative projections.

Nashville, TN ($42,138 annual revenue, 39% occupancy): Non-owner-occupied STR permits in residential zones have been restricted. Existing permits are grandfathered, but new permits in many neighborhoods are no longer available. This limits your ability to operate legally in certain areas, which directly impacts DSCR viability.

Austin, TX ($35,561 annual revenue, 38% occupancy): Type 2 STR licenses (non-owner-occupied in residential areas) have been phased out. Properties zoned commercial remain viable. Austin’s STR income depends on which license type the property holds.

San Diego, CA ($51,280 annual revenue, 45% occupancy): The city recently defeated a proposed $12,000 annual vacation rental tax (Prop K), but regulatory pressure continues. License caps and primary-residence requirements apply in certain zones.

The safest markets for long-term DSCR exposure? Florida’s Gulf Coast corridor (Bradenton, Sarasota, Destin), Arizona’s desert markets (Phoenix, Scottsdale, Sedona, with the preemption caveat), and established resort communities like Kissimmee and Gatlinburg where the local economy depends on STR tourism.

The Full 50-Market Revenue Ranking

For investors who want to see every market, here is the complete ranking by average annual gross revenue per property. I have flagged the markets where regulatory risk warrants extra due diligence.

Source: StaySTRA market data, February 2026. *Arizona preemption law currently under legislative review; if weakened, risk rating would increase for Scottsdale, Sedona, and Phoenix.

Don’t let the lower-ranked markets discourage you. A market at $35,000 in annual revenue can still produce a strong DSCR if the acquisition price is proportionally low. Gatlinburg at $35,778 with cabin prices in the $350,000 to $450,000 range? That is DSCR-viable. Myrtle Beach at $19,243? That is going to be a stretch unless you find a deeply discounted property.

What DSCR Lenders Actually Look For in an STR Market

I have talked to enough DSCR loan officers over my years in this business to know that they evaluate STR properties differently from traditional rentals. Here is what moves the needle beyond the ratio itself:

Established market with comp data. Lenders need appraisal comparables. Markets with high listing counts (Kissimmee at 10,143, Panama City Beach at 10,196, Phoenix at 6,359) give appraisers more data points. Thin markets like Fort Pierce (509 listings) or Dripping Springs (418 listings) can create appraisal challenges that stall your loan.

Occupancy above 40%. Several lenders I have spoken with use 40% occupancy as an informal threshold. Below that, they start questioning whether the revenue projection is sustainable. In our dataset, 23 of 50 markets run below 40% occupancy. That does not mean they are bad markets, but it means your lender may apply a haircut to projected revenue.

Revenue documentation. Most DSCR lenders for STR properties accept 12 months of actual booking income from Airbnb or Vrbo, or projected revenue from market data providers. Having access to granular market data (like what StaySTRA’s Airbnb calculator provides) strengthens your loan application by showing the lender exactly what comparable properties earn in your target market.

Regulatory stability. This one is harder to quantify, but lenders increasingly ask about it. A market with a stable regulatory framework (Florida’s Gulf Coast, Tennessee’s Smoky Mountains, Oklahoma’s Broken Bow) represents lower long-term risk than a market where the rules change every city council session.

My Five DSCR-Friendly Market Picks for 2026

After running the numbers across all 50 markets, weighing revenue against acquisition costs, occupancy stability, regulatory exposure, and lender-friendliness, here are the five markets I would tell any DSCR borrower to investigate first:

1. Bradenton, FL. Best revenue-to-price ratio in a low-regulation environment. $68,926 annual revenue, moderate acquisition costs, established Gulf Coast market.

2. Phoenix, AZ. Highest occupancy in the top 10 (52%), deep listing pool for comps, diversified demand base. Watch the preemption law situation.

3. Sarasota, FL. $65,441 annual revenue at 50% occupancy, strong year-round demand, favorable Florida regulatory environment. Sister market to Bradenton with slightly higher price points.

4. Kissimmee, FL. Largest comp pool in the country (10,143 listings), purpose-built vacation rental inventory, lower acquisition costs. The DSCR math works on volume and consistency, not sky-high ADR.

5. Sedona, AZ. The mountain market that actually pencils for DSCR. $71,210 annual revenue, 49% occupancy, and acquisition prices well below Park City or Lake Tahoe. Red-rock tourism provides four-season demand.

If you are exploring DSCR lenders for your next STR acquisition, these five markets give you the strongest combination of revenue, affordability, and regulatory stability.

[esc_cta_dscr]

How to Use This Data for Your DSCR Application

Pulling this analysis together reminded me of something my first boss at the Census Bureau used to say: “The data tells you where to look. It never tells you what to buy.” That is still true 40 years later.

Here is how I would suggest using this 50-market dataset if you are actively shopping for a DSCR-financed STR property:

Step 1: Start with the revenue floor. Determine your target acquisition price, calculate your likely PITIA, and multiply by 1.25. That gives you the minimum annual gross revenue you need. If you are buying at $500,000, you probably need at least $55,000 to $62,000 in gross revenue. That narrows your search to roughly the top 20 markets in our ranking.

Step 2: Run the numbers on a specific property. Market averages are exactly that. The property you are considering might outperform or underperform the market average by 30% or more. Use StaySTRA’s Airbnb calculator to estimate revenue for the specific property type, bedroom count, and location within the market.

Step 3: Get an insurance quote before you commit. Especially in coastal and mountain markets. Insurance can swing your DSCR by 0.1 to 0.2 points. That is the difference between the best rate tier and a rate bump.

Step 4: Check local regulations before you fall in love with the numbers. Explore StaySTRA’s location pages for regulatory summaries on every market in our database. A property that cannot legally operate as an STR has a DSCR of zero, no matter how good the revenue projections look.

We do our best to keep our data accurate and up to date, but markets move fast and we are only human. Always verify current figures directly with local sources before making investment decisions.

Ready to Run the Numbers on a Specific Market?

This 50-market analysis gives you the landscape. The next step is drilling into the specific property you are considering. StaySTRA’s Airbnb calculator lets you estimate revenue for a specific property type and location, so you can plug real numbers into your DSCR equation instead of market averages.

Explore detailed market data, occupancy trends, and regulatory summaries for every market in our database on the StaySTRA location pages.