1st Advantage MortgageFor Denton, TX rentals, the DSCR test compares rent to the full payment. The Census medians that frame it are $1,420 rent, $348,200 value and $5,493 in yearly taxes.
Local data for Denton investors
A DSCR lender in Denton is comparing a rent against a payment, and the citywide benchmarks are a median gross rent of $1,420 and a median home value of $348,200. The rent figure is close to the Texas median of $1,403. By the simple measure of annual rent over home value, Denton sits at 4.9%, on the low side, so the payment, not the rent, usually decides whether a file clears. Lenders do not underwrite a ratio like that, but investors use it to decide where to look first.
| Indicator | Texas | Denton | Difference |
|---|---|---|---|
| Annual property tax bill, median | $4,232 | $5,493 | +30% |
| Household income, median | $78,476 | $76,019 | -3% |
| Typical owner-occupied value | $283,800 | $348,200 | +23% |
| Typical monthly rent | $1,403 | $1,420 | +1% |
| Persons per household | 2.69 | 2.53 | |
| Share in 2-4 unit buildings | 5.3% | 8.1% | +54% |
| Share of homes detached | 64.4% | 56.1% | -13% |
| Long commuters, 45 min plus | 16.9% | 15.8% | -7% |
| Workers on their own account | 10.5% | 8.6% | -18% |
| Renters paying 30%+ of income | 51.7% | 60.7% | +17% |
| Units sitting vacant | 9.4% | 6.4% | -32% |
| Typical construction year | 1992 | 1997 | |
| Annual rent divided by value | 5.9% | 4.9% | -18% |
| Tax as a share of home value | 1.49% | 1.58% | +6% |
| Residents (Census estimate) | 30,188,424 | 152,866 |
Tenure in Denton is split fairly evenly: 50.0% renter-occupied and 50% owner-occupied, with the renter share well above the Texas median of 37%. Household income runs a median $76,019 (close to the Texas median of $78,476), while 61% of renters spend 30 percent or more of income on housing.
The kind of housing in Denton
Denton has a deep multifamily layer: roughly 38% of units sit in buildings of two or more, with 8% in duplexes through fourplexes. Newer housing (median year built 1997) keeps repair budgets lighter, though competing new-build rentals can cap what a landlord can charge.
The Census counts 6% of Denton housing units as vacant, with a rental vacancy figure of 5.5%.
What stands out in Denton
A 4.9% gross ratio leaves little margin in Denton. Every dollar of insurance, tax and association dues matters, and some deals work only with lower leverage. Newer construction (median built 1997) lowers near-term repair risk, but association rules and builder-grade finishes can limit rent growth. With about 50% of households renting, Denton has enough tenants to support investors without being dominated by them.
Insurance, tax and flood context for Denton
Homeowners in Denton paid a median $5,493 in real estate taxes, well above the Texas median of $4,232, an effective rate near 1.58% of home value against 1.49% statewide. Measured against a year of median rent, taxes eat about 32% before any other cost shows up.
Denton County carries a relatively high overall rating in FEMA's National Risk Index, where tornadoes (very high), hail (very high) and ice storms (very high) rank highest.
| Hazard in Denton County, FEMA index | Level |
|---|---|
| Heat waves exposure | Relatively High |
| Ice storms exposure | Very High |
| Hail exposure | Very High |
| Tornadoes exposure | Very High |
| Social vulnerability score | Very Low |
| Annualized loss estimate | Relatively High |
| Composite risk | Relatively High |
In Denton County, as anywhere, the premium is part of PITIA, which means a quote with the roof, age and flood zone of the actual Denton address belongs in your file early.
Rent math for Denton buyers
At the city medians a DSCR file in Denton has $962 a month after taxes to cover principal, interest, insurance and dues if the ratio is 1.00, or $678 if the ratio is 1.25. Those two numbers show why insurance quotes and tax estimates come first.
What TX law and Denton require of landlords
Local rental rules in Denton are not summarized here because we could not verify them from a city source. Ask the city and Denton County about registration, inspection and short-term rental requirements, and confirm what an HOA allows. For Denton short-term hosts, one state-level point stands out. Texas imposes a state hotel occupancy tax on rentals of 29 days or less, collected by the owner unless a booking platform collects for the owner, and cities, counties and special districts can add a separate local hotel tax that the owner must register for and remit.
Before you set the Denton rent, know that Texas caps the security deposit this way: No statutory cap (Tex. Prop. Code §§ 92.103, 92.104, 92.107). A Denton landlord must handle the deposit within 30 days after move-out under Texas law. To end a month-to-month tenancy in Denton, the landlord's notice period is 1 month (unless the lease says otherwise).
Neighbors of Denton by the numbers
Looking across the table, values run from $303,000 (Fort Worth) up to $642,100 (Frisco), and Denton lands at $348,200.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Fort Worth | 43% | $5,191 | $303,000 | 963,194 | $1,509 |
| McKinney | 36% | $7,791 | $471,800 | 210,600 | $1,901 |
| Plano | 43% | $6,700 | $465,900 | 290,594 | $1,841 |
| Frisco | 34% | $9,572 | $642,100 | 219,304 | $2,014 |
| Denton | 50% | $5,493 | $348,200 | 152,866 | $1,420 |
Employers and institutions near Denton rentals
Self-employment accounts for 8.6% of Denton's workforce, so many local investors earn income that a standard payroll-based mortgage underwrites poorly. Other workforce markers: government workers are about 19% of employment, 42% of adults hold a bachelor's degree or higher and 16% of commuters travel 45 minutes or more.
Wikipedia's employer table for Denton names University of North Texas, Denton Independent School District, Peterbilt Motors, Texas Woman's University and Denton County (in Denton) among the largest employers, a useful starting point for judging how steady renter demand is. Education is part of the Denton rental picture, with University of North Texas, University of North Texas System, University of North Texas Health Science Center and University of North Texas at Dallas among the institutions listed. On the logistics side, interstate access via I-35, 35E and 35W and air service through Dallas/Fort Worth International Airport and Denton Municipal Airport are noted for Denton.
From a Denton listing to a loan
A good Denton file has four pieces: rent evidence, a tax estimate, an insurance quote and cash. Preview the ratio in the calculator, then apply or talk to us.
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Sources and data notes
- Census Bureau ACS 5-year 2020 to 2024 tables
- FEMA National Risk Index
- Wikipedia article, Denton, Texas
- Tex. Prop. Code §§ 92.103, 92.104, 92.107, the Texas deposit law
- Texas Comptroller, hotel occupancy tax
- Hotel tax FAQ for short-term rentals (Texas)
Census figures are 2020 to 2024 ACS five-year estimates for Denton and carry margins of error. The Texas legal summaries are from the RedFlagLease dataset, licensed CC BY 4.0, with statute links. Our check date is October 2026, so look for newer Denton rules before you commit.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
Which rent counts when I finance a Denton property?
Underwriters take the lease if one exists and compare it with the appraisal's rent estimate; the lower figure often governs. Denton median rent is $1,420.
Do taxes and insurance count in the Denton DSCR ratio?
They do. Rent of $1,420 divided by 1.25 gives about $1,136 as the payment ceiling, and $458 of that is spoken for by the median Denton tax bill.
How much real estate tax do Denton homeowners pay a year?
Denton owners report a median $5,493 in annual real estate taxes, an effective 1.58% (Texas: 1.49%). Your own bill depends on the assessed value after purchase.
Will a lender count nightly rental income at a Denton property?
Often, with conditions: legal use under city and association rules, documented income and an insurance policy that covers guests. Denton owners should check all three first.
What does Texas law say about deposits at a Denton rental?
Limit: No statutory cap. Return: 30 days. Statute: Tex. Prop. Code §§ 92.103, 92.104, 92.107. Confirm current text before you rely on it.
How exposed is Denton to natural hazards?
FEMA's index puts the county at relatively high overall. A lender cares about the premium and any flood requirement, which are address-specific in Denton.
Should a Denton rental be bought in an LLC?
An individual can borrow too. If you prefer an entity for the Denton purchase, expect to provide formation documents and sign a personal guaranty.