Turn Vacation Properties into Profit

Short-Term Rental Property Loan Highlights

• Property Types: Available for single-family homes, 2-4 unit properties, condos, and townhouses used as short-term rentals.
• Loan Amount: Loan amounts up to $5 million or more, depending on the program and LTV.
• Loan Terms: Typically utilizes a 30-year fixed DSCR loan, with 40-year interest-only options available to maximize cash flow.
• No Personal Income Documentation: Qualification is based on the rental income of the property, not your personal income.
• Rental Income Verification: The rental income generated by the property is the key factor. We can use AirDNA income analysis or 12 months of statements from a vacation rental management platform to prove the Short-Term Rental (STR) income.

What is Debt Service Coverage Ratio (DSCR)?

The Debt Service Coverage Ratio (DSCR) is a financial metric used by lenders to evaluate a property's ability to pay back a loan. It is calculated by dividing the property's net operating income (NOI) by its total debt service (mortgage payment). A ratio of 1.0 means the income equals the expenses. A ratio above 1.0 means the property generates more income than it costs. For short-term rentals, we use historical or projected rental income to make this calculation.

How is Income Calculated for Short-Term Rentals?

Unlike long-term rentals which use an annual lease, short-term rental income can be verified using a few different methods. Lenders can use projected rental income data from third-party services like AirDNA, which analyzes comparable rental properties in the area to provide a reliable income estimate. Alternatively, if the property has an existing rental history, we can use 12 months of statements from a platform like Airbnb or a vacation rental management company to establish a track record of income. This flexibility is key for investors in the dynamic short-term rental market.