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Racine, WI DSCR LoansHybrid Market

DSCR Loans in Racine, WI

Finance investment properties in Racine with a DSCR loan. Qualify based on rental income, not tax returns. Median rent at $1,100/mo with +4.2% annual growth.

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$1,100/mo
Median Rent
$175K
Median Home Price
+4.2%
Rent Growth (YoY)
78K
Metro Population

Market data updated 2026-01-30

Racine Market Snapshot

Why Invest in Racine?

  • SC Johnson headquarters and manufacturing sector anchor employment
  • Lake Michigan waterfront and Frank Lloyd Wright architecture attract visitors
  • Affordable entry points with strong cash flow and Chicago commuter potential

Key Economic Drivers

ManufacturingHealthcareEducationRetail
Median Rent
$1,100/mo
Rent Growth
+4.2%

Property Types We Finance

Single Family2-4 UnitsMulti-Family

Popular Investment Areas

DowntownWest RacineCaledoniaMount Pleasant

Metro Population

78K

Racine metro area — a strong tenant pool for rental property investors.

DSCR Analysis

Hypothetical DSCR Illustration for Racine, WI

An illustration built from Racine's market data, with no interest rate assumed. Taxes and insurance use local averages; principal and interest come from your own quote, so the figures below show how much of the median rent is left for that payment at common DSCR targets.

Loan Structure

Purchase Price (local median)$175,000
Down Payment20% of the price
Loan Amount80% of the price
Interest RateSet by your quote

Monthly Costs (PITIA)

Principal & InterestFrom your quoted rate
Property Tax (1.76% rate)$257
Insurance$150
Total PITIAP&I + taxes + insurance

What the Median Rent Has to Cover

Hypothetical illustration. DSCR = rent ÷ PITIA; no rate assumed.

Median Monthly Rent$1,100
Taxes + insurance37% of rent
Left for P&I + HOA at a 1.0 DSCR63% of rent
Left for P&I + HOA at a 1.25 DSCR43% of rent
Test the payment from your quote in the DSCR calculator

Hypothetical illustration, no interest rate assumed. At Racine's median rent of $1,100/month, local property taxes (1.76% of the $175,000 median price) and insurance (about $1,800 a year) use roughly 37% of the rent. To reach a 1.0 DSCR, principal, interest and any HOA dues would have to fit within the remaining 63% of rent; a 1.25 DSCR leaves about 43%. Your actual ratio depends on the payment in your own quote, which you can test in our DSCR calculator.

Estimated Cap Rate
4.5%
Racine's estimated cap rate is 4.46%, indicating a appreciation-focused market where price growth drives returns.
Market Comparison

Racine vs. Wisconsin Average

How Racine's rental market compares to the Wisconsin statewide average.

Median Rent
$1,100/mo
↓ 21.4% below state avg
Median Home Price
$175K
↓ 32.7% below state avg

Racine's median rent of $1,100/month is 21.4% below the Wisconsin state average of $1,400/month. Home prices at $175,000 are 32.7% below the state average of $260,000.

Investment Strategy

Racine Investment Strategy: Hybrid

For smaller-market investors, Racine offers a solid hybrid opportunity. The 7.54% rent-to-price ratio gives the rent room to cover the full payment, while manufacturing employment keeps vacancies manageable at 5.9%. Both Downtown and West Racine offer investor-friendly fundamentals.

Tax + Ins. / Rent
37%
Cap Rate
4.5%
Vacancy Rate
5.9%
Tax Rate
1.76%

Short-Term Rental Regulations in RacineModerate

Racine requires short-term rental operators to obtain permits and comply with local zoning regulations. Review current city and county ordinances before listing a property.

FAQ

DSCR Loan Questions for Racine

How is the DSCR calculated for Racine rental properties?
The DSCR is the property's monthly qualifying rent divided by its full payment, PITIA (principal, interest, taxes, insurance and association dues). For a Racine rental, the rent comes from a lease or the appraiser's market rent schedule, the taxes reflect the local 1.76% rate, and the principal and interest come from your own quote. Run the address through our DSCR calculator before you offer.
How much cash do I need to invest in Racine real estate with a DSCR loan?
Plan for three pieces: the down payment the program requires, closing costs from your Loan Estimate, and any reserves the program wants left in your accounts after closing. On a Racine property near the $175K median, each of those is set by the program and your file, so ask for all three in writing before you make an offer.
Which Racine neighborhoods are investor-friendly?
Racine investment areas vary by proximity to manufacturing employers and amenities. Downtown and Caledonia consistently attract strong tenant demand, while Mount Pleasant may offer better entry prices for newer investors using DSCR financing.
Can I finance a Racine Airbnb with a DSCR loan?
Yes, on programs that accept short-term rentals, provided the use is permitted at the Racine address. Expect to document the income the way the program asks, through booking history or a market report, and expect the program's own down payment and reserve rules for short-term rentals, which are often stricter than for a long-term lease.
What are typical property tax rates in Racine?
Property tax rates in Racine, Wisconsin average approximately 1.76% of assessed value. The 1.76% rate is higher than many states, so rents need more room to reach the same DSCR. Check the actual bill for your address before you estimate the ratio.
Are there prepayment penalties on Racine DSCR loans?
Often, yes. Many DSCR loans carry a prepayment penalty, such as a 3-2-1 or 5-4-3-2-1 step-down (a declining percentage of the balance over the years), and some programs offer shorter or no-penalty options that change the pricing. Prepayment penalty rules can also vary by state. If you may sell or refinance early, factor the penalty into your Racine plan.
How do Racine's high property taxes affect DSCR qualification?
Racine's 1.76% property tax rate is higher than many markets, and taxes sit inside the PITIA the rent is measured against. That means a Racine property needs more rent to reach the same DSCR than a similar home in a lower-tax area. Compare the actual tax bill and the supportable rent on each address you consider.

Licensing for Wisconsin

Cornerstone First Mortgage, LLC (NMLS #173855) — Wisconsin Mortgage Banker License, No. 173855BA.

Check any license on NMLS Consumer Access, or see every state on our state license list. DSCR loans are business-purpose loans for investment property only.

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