South Florida real estate has fundamentally changed since 2020. Rents are 40–60% higher than pre-pandemic levels in many submarkets, cap rates compressed, and out-of-state and international investors are active across the tri-county area. DSCR lending has become the dominant financing mechanism for non-owner-occupied properties in this environment.
Rent Levels and DSCR Math in South Florida
Miami-Dade: A clean 3/2 SFR in a solid neighborhood commands $2,400–$3,200/month. Broward: $2,200–$2,800/month for comparable product. Palm Beach: $2,500–$3,500/month, with premium coastal submarkets pushing $4,000+. At a $400K purchase price with 25% down, PITI runs approximately $2,100–$2,300/month. Most South Florida rentals generate a positive DSCR of 1.1–1.3 at current rent levels.
Insurance Is the Variable
Insurance is the wild card in South Florida DSCR underwriting. Annual premiums on a $400K home can run $6,000–$15,000 depending on location, construction type, age, and flood zone. A property in a FEMA AE flood zone with wind mitigation deficiencies can have insurance costs that destroy the DSCR. Always get an insurance quote before running your DSCR math.
What South Florida Lenders Require
Most DSCR lenders active in South Florida require: 640+ credit score (better rates at 700+), 20–25% down on purchase, 6 months PITIA in reserves, a property inspection report, and lease or rent schedule showing market rent coverage. Some lenders restrict lending in specific ZIP codes due to condo deconversion risk or HOA litigation. Always verify lender guidelines for your specific address.
