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By Robin Simon, President, Harpoon Capital · About · LinkedIn · Author, The Book on DSCR Loans (Available on Amazon)
Iowa pairs low entry prices with something rare for short-term rental investors: a state law that, as BNBCalc describes it, bars cities from banning short-term rentals or charging an STR-specific permit fee. Home prices run from about $218,000 in Davenport to about $330,000 in Ames (Redfin, 2026), and the “rent-to-price ratios” sit between roughly 0.37% and 0.54% a month on BiggerPockets, which is thin for a DSCR deal, so the underwriting matters. Investors buying here typically finance with Iowa DSCR loans, which are qualified primarily based on the property rather than the borrower's personal income.
This breakdown uses market data collected as of October 2026, the most current snapshot available heading into next year's buying season. If you're evaluating a purchase in the final months of 2026, keep in mind that your first full year of rental income, appreciation, or short-term rental revenue lands in 2027 regardless of when you close. A deal you underwrite today is already a 2027 investing decision, just one made with the freshest data available right now.
Iowa has no statewide short-term rental license, and under Iowa Code §414.1(1)(e) cities cannot adopt STR-specific restrictions, charge a license fee just for operating one, or treat it as anything other than a residential use, according to BNBCalc's Davenport guide. Taxes still apply: Davenport's combined lodging tax is 12%, and Awning reports local hotel and motel taxes of 1% to 7% on top of state taxes in many Iowa communities.
One pattern shows up in Redfin's “Compete Scores”: every market here scores 65 or higher, with Cedar Rapids at 88 and Davenport at 87 (“very competitive”), while Iowa City sits at 70 and Ames at 65, so the cheaper markets are the hotter ones and buyers there should expect to bid at or near list.
Below, we break down six Iowa markets worth watching, using current data from Redfin, BiggerPockets, and AirDNA.
Note: Home price appreciation and rent-growth figures below come from Redfin's median sale price data and BiggerPockets' Market Finder, which use different methodologies and can vary from one another. BiggerPockets figures for Davenport, Sioux City and Des Moines cover the wider Davenport–Moline–Rock Island (IA–IL), Sioux City (IA–NE–SD) and Des Moines–West Des Moines metros, and its appreciation for Davenport (2.41%) runs well below Redfin's recent +9.2%, so treat it as directional. Redfin's search-data tables for Des Moines and Ames are identical, so they're treated as regional.
Game-day demand and soaring STR revenue
Iowa City is home to the University of Iowa, and it pairs the highest prices among the core markets with the strongest short-term rental revenue on the list, i.e. football weekends and campus visitors.
BiggerPockets points to the University of Iowa as the major economic driver, with healthcare and research adding to a steady demand for student housing and rentals. However, a 0.37% rent-to-price ratio and 1.86% rent growth mean the long-term rent alone does little to cover a mortgage at today's prices, and the 7.4% drop in price per square foot suggests a changing sales mix. Redfin search data, which tracks home searches rather than actual moves, shows Minneapolis buyers looking at Iowa City more than any other metro, and First Street data on Redfin rates the flood risk as “major,” with 8% of properties exposed over the next 30 years.
The AirDNA submarket for Iowa City posts a score of 91/100, with Revenue Growth (93) and Rental Demand (84) leading, Seasonality (78) and Investability (69) in good shape, and Regulation (60) the “soft spot.” Annual revenue per listing averages $35,718 (up 22.3% year-over-year), the highest of the six markets, with an average daily rate of $183.43 (up 9.6%) and occupancy of 61% (up 13.4%). Total active listings sit at 375, up 9.7%, and top listings such as a family-friendly game-day home earning $197K a year at 80% occupancy show where the “premium” sits.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Iowa City and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · AirDNA↗
Investor Takeaway: Iowa City offers the highest STR revenue in the article on a thin long-term rent ratio. Investors should generally underwrite on trailing twelve-month actuals, model the football calendar, and treat the long-term rent as the floor.
Capital-city depth, steady STR income
Des Moines is the state capital and Iowa's largest city, with a finance-and-insurance economy and the largest short-term rental market on the list – and a steady rather than spectacular pace.
BiggerPockets points to finance and healthcare, with Principal Financial Group and UnityPoint Health among the major employers, and Redfin search data, which tracks home searches rather than actual moves, shows Minneapolis buyers looking at Des Moines more than any other metro, ahead of Omaha and Chicago. However, 40.7% of homes saw price drops, a sign that sellers are not winning every negotiation, and First Street data on Redfin rates the flood risk as “minor” (6% of properties). On the STR side, Awning reports that Des Moines doesn't currently require a dedicated short-term rental permit, though another Awning guide says a rental permit and zoning compliance apply, so confirm with the city.
The Des Moines market posts an AirDNA score of 72/100, with Rental Demand (82) and Investability (75) leading, Seasonality (70) and Regulation (66) in the middle, and Revenue Growth (62) the “soft spot.” Annual revenue per listing averages $28,741 (up 1.4% year-over-year), with an average daily rate of $152.71 (up 3.7%) and occupancy of 58% (down 1.8%). Total active listings sit at 1,086, up 2.7%, by far the largest field on the list, and the Ankeny submarket (score 78, $32K a year) leads the area.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Des Moines and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · Awning Iowa STR Guide↗ · AirDNA↗
Investor Takeaway: Des Moines offers the deepest tenant and STR markets in Iowa at a middle-of-the-pack pace. Investors should generally underwrite the long-term rent first, expect to negotiate on a market where 40.7% of homes cut their price, and treat STR income as a “bonus.”
Fast sales and tight STR supply
Sioux City sits on the Missouri River where Iowa, Nebraska and South Dakota meet, and it combines affordable entry prices with the strongest appreciation on BiggerPockets and a fast-moving sales market.
BiggerPockets points to a diverse economy in healthcare and manufacturing, with UnityPoint Health among the major employers, and the city's historic properties and location along the Missouri River support the rental pool. However, a Compete Score of 75 and a 17-day pace mean that well-priced homes move quickly, so financing should be lined up before you tour, i.e. pre-approved. Redfin shows no migration data or flood figures for Sioux City, and no STR rules beyond the state preemption were confirmed.
The AirDNA submarket for Sioux City posts a score of 92/100, with Rental Demand (92) and Seasonality (90) leading and Revenue Growth (54) the “soft spot.” Annual revenue per listing averages $28,146 (up 1.9% year-over-year), with an average daily rate of $126.93 (up 6.3%) and occupancy of 67% (down 2.7%), the highest occupancy among the core markets after Cedar Rapids. Total active listings sit at just 65, down 5.8%, so this is a thin field where standouts such as The Clubhouse ($65K a year) carry the averages.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Sioux City and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · AirDNA↗
Investor Takeaway: Sioux City offers strong appreciation and a 0.52% rent ratio at prices under $230,000, in a fast, competitive market with a very small STR field. Investors should generally be ready to bid at list, underwrite the long-term rent, and treat STR income as a small-sample “bonus.”
Thinking About One of These Markets?
Get a same-day DSCR Loan quote for a specific deal, or browse the full Harpoon Capital DSCR Loan Program to see rates, LTV, and qualification details before you keep reading.
Top rent ratio and a hot sales market
Davenport anchors the Iowa side of the Quad Cities, and it offers the best rent-to-price ratio and rent growth on the list – in a market where homes now sell in about 12 days.
BiggerPockets describes a stable market in the Quad Cities area driven by manufacturing and healthcare. However, the gap between BiggerPockets' 2.41% appreciation and Redfin's 9.2% price gain suggests that prices have jumped recently, so the rent ratio you see on BiggerPockets may already be thinner at today's prices, and First Street data on Redfin rates the flood risk as “major,” with 12% of properties exposed. On the STR side, BNBCalc reports that Davenport has no dedicated short-term rental ordinance, that its general rental property license ($30 to $60 a year) may still apply, and that the combined lodging tax is 12%.
The AirDNA submarket for Davenport posts a score of 90/100, with Investability (80) leading, Rental Demand (79) and Revenue Growth (79) in good shape, and Seasonality (73) and Regulation (70) steady. Annual revenue per listing averages $27,955 (up 4.1% year-over-year), with an average daily rate of $144.26 (up 3.0%) and occupancy of 60% (up 3.2%). Total active listings sit at 313, up 12.2%, so the field is filling, and mansion-style listings such as The Estate at Prospect Park ($115K a year) set a high bar.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Davenport and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Davenport STR Guide↗ · AirDNA↗
Investor Takeaway: Davenport offers the lowest prices and the best rent ratio on the list in a fast, competitive market with a growing STR field. Investors should generally underwrite at today's prices, not last year's, confirm the rental license, and price flood insurance into the deal.
Perfect STR score, six-day sales
Cedar Rapids is Iowa's second-largest metro, with a manufacturing and technology economy, the hottest buyer market on the list and the highest AirDNA score in the article!
BiggerPockets points to manufacturing and healthcare, with Rockwell Collins and Mercy Medical Center among the major employers, and Redfin search data, which tracks home searches rather than actual moves, shows Minneapolis buyers looking at Cedar Rapids more than any other metro, ahead of Chicago and Omaha. However, homes that go pending in about 7 days leave little room to negotiate, and First Street data on Redfin rates the flood risk as “moderate” (11% of properties) and tornadoes as the leading wind threat. On the STR side, BNBCalc describes a local registration program under the state preemption, while Awning says Cedar Rapids has no standalone STR ordinance, so confirm with the city.
The AirDNA submarket for Cedar Rapids posts a score of 100/100, with Revenue Growth (97) and Rental Demand (96) near the top and Regulation (54) the “soft spot.” Annual revenue per listing averages $31,281 (up 30.4% year-over-year), with an average daily rate of $118.98 (up 7.1%) and occupancy of 81% (up 27.5%). Total active listings sit at 376, up 13.9%, and because an occupancy figure that high is unusual, verify it against trailing twelve-month actuals before relying on it.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Cedar Rapids and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · AirDNA↗
Investor Takeaway: Cedar Rapids offers a perfect STR score and the fastest sales pace on the list. Investors should generally expect to bid at or above list, verify the occupancy against actuals, and treat the long-term rent as the base case.
Campus demand and slipping rents
Ames is home to Iowa State University, and it is the most expensive market in the article by Redfin's median, with visitor-driven short-term rental demand but the weakest rent trend.
BiggerPockets points to Iowa State University as a major driver of the local economy and of demand for student housing and rentals, with agriculture and research adding to it. However, falling rents alongside a 6.35% appreciation figure mean the rent ratio is getting thinner, and the 5.2% drop in price per square foot suggests a changing sales mix. First Street data on Redfin rates the flood risk as “minor” (4% of properties). The state preemption applies in Ames as in every Iowa city, and no Ames-specific rules were confirmed.
The AirDNA submarket for Ames posts a score of 74/100, with Rental Demand (87) leading, Seasonality (77) in good shape, and Regulation (67), Investability (65) and Revenue Growth (56) the softer subscores. Annual revenue per listing averages $29,445 (up 4.7% year-over-year), with an average daily rate of $176.99 (up 3.0%) and occupancy of 52% (up 1.4%). Total active listings sit at 171, up 6.2%, and top listings such as Raspberry Hill Bed & Breakfast ($120K a year) show how much a distinctive property can earn.
Financing note: Ames deals often qualify on TTM actuals or STR revenue projections given the event-driven revenue base, and Harpoon Capital offers industry leading DSCR Loans for properties throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · AirDNA↗
Investor Takeaway: Ames offers campus-driven STR demand and population growth, with the highest prices in the article and falling rents. Investors should generally underwrite on trailing twelve-month actuals, model the academic calendar, and treat the long-term rent as the floor.
| MARKET | AIRDNA SCORE |
ANNUAL REVENUE |
AVG. DAILY RATE |
OCCUPANCY | YOY LISTING GROWTH |
|---|---|---|---|---|---|
| Cedar Rapids | 100 | $31,281 (+30.4%) |
$118.98 (+7.1%) |
81% (+27.5%) | +13.9% (376 listings) |
| Sioux City | 92 | $28,146 (+1.9%) |
$126.93 (+6.3%) |
67% (-2.7%) | -5.8% (65 listings) |
| Iowa City | 91 | $35,718 (+22.3%) |
$183.43 (+9.6%) |
61% (+13.4%) | +9.7% (375 listings) |
| Davenport | 90 | $27,955 (+4.1%) |
$144.26 (+3.0%) |
60% (+3.2%) | +12.2% (313 listings) |
| Ames | 74 | $29,445 (+4.7%) |
$176.99 (+3.0%) |
52% (+1.4%) | +6.2% (171 listings) |
| Des Moines | 72 | $28,741 (+1.4%) |
$152.71 (+3.7%) |
58% (-1.8%) | +2.7% (1,086 listings) |
Source: AirDNA, current as of 2026. Scores and figures reflect each market or submarket as defined by AirDNA and may not correspond 1:1 with city or county boundaries. As of October 2026
A few patterns stand out. Iowa City and Cedar Rapids are the two markets where revenue grew by more than 20%, with Iowa City's gain coming from rate (+9.6%) and Cedar Rapids's from occupancy (+27.5%), while Sioux City is the only market where listings fell, which helps explain why its rate rose 6.3% even as occupancy slipped. Davenport, Cedar Rapids and Iowa City all added listings at a pace of roughly 10% to 14%, so competition is arriving where the numbers look best. Des Moines is the largest field at 1,086 listings, but its revenue growth is the slowest at 1.4%.
Iowa's real estate landscape offers a strategy for nearly every type of investor:
Market-level data is a starting point, not a substitute for underwriting the specific property, neighborhood, and rental strategy in front of you. Iowa's state preemption limits what cities can do to short-term rentals, but taxes and local licensing still apply, so confirm what's required at your specific address before you close, and expect to compete for well-priced homes in Cedar Rapids and Davenport.
If you are ready to invest in one of these markets, start with our Iowa DSCR loans page.
Sources: Redfin housing market data, BiggerPockets Market Finder, AirDNA market and submarket data (airdna.co), BNBCalc Davenport STR guide and Awning Iowa STR regulations. Data collected as of October 2026, ahead of the 2027 investing season.
According to BNBCalc, Iowa Code §414.1(1)(e) bars cities from adopting STR-specific restrictions or charging a license fee just for operating one, and requires them to treat short-term rentals as a residential use for zoning. Taxes and general rental licensing can still apply, for example Davenport's 12% combined lodging tax, so confirm current rules with the city and a local attorney before you close.
No. Out-of-state and first-time investors can buy investment property in Iowa without any license. A DSCR loan qualifies you primarily based on the property itself rather than your personal income or professional credentials, which is part of why it's such a common financing tool for out-of-state buyers.
A DSCR (Debt Service Coverage Ratio) loan qualifies a property primarily based on the property (its value, value and location) relative to its mortgage payment, rather than the borrower's personal income or tax returns. If the property's projected or actual rent covers the mortgage payment (a DSCR of 1.00x or higher), it's generally easier to qualify, and Harpoon Capital also offers options for deals below 1.00x.
Redfin's Compete Scores are highest in Cedar Rapids (88) and Davenport (87), where median sale prices are about $218,000 to $224,000 and homes go pending in roughly 7 to 13 days. Buyers there should expect to bid at or near list, with financing and inspections lined up in advance.
Harpoon Capital's DSCR loan program allows as little as 15% down on qualifying purchases, up to 85% LTV, with cash-out refinances available up to 80% LTV. Exact terms depend on the property, credit profile, and DSCR ratio. Fill out our DSCR Loan Application to see specific numbers for your deal.
Ready to Run the Numbers on an Iowa Deal?
Whether you're eyeing Davenport's rent ratio or game-day stays in Iowa City, get a same-day rate and terms with our two-minute DSCR quote form, or explore the full Iowa DSCR Loans Program to see how we qualify the property, not just the borrower.
This article is for informational purposes only and does not constitute investment, legal, or financial advice. Harpoon Capital encourages investors to conduct independent due diligence before making any real estate investment decision.