The practical path to financing a short-term rental — qualify on the property’s nightly income via AirDNA or booking history, not your tax returns.
Short-term rentals can out-earn a long-term lease by a wide margin, but most conventional lenders don’t know how to underwrite nightly income — which is why financing an Airbnb trips up so many investors. The solution is a DSCR loan built for short-term rentals, which qualifies the property on its projected or actual STR income instead of your tax returns. This guide walks through how to finance an Airbnb property, step by step.
For the full product breakdown, see our Airbnb and short-term rental financing; below is the practical path.
Step 1: Pick a Property in a Real STR Market
Location drives short-term rental income, so start with a market that has genuine nightly demand — a vacation destination, an event city, or a tourism hub. Strong markets produce the higher seasonal and nightly rates that help a property qualify.
Step 2: Establish the Short-Term Income
This is the key difference from a standard rental. We use the property’s short-term rental income, drawn from one of two sources: projected STR market rents from data platforms like AirDNA, or 12 months of actual booking history if the property has it. Either way, the nightly and seasonal rates count toward qualification rather than being capped at a long-term lease figure.
Step 3: Check the DSCR and Compliance
We compare that STR income to the full mortgage payment to get the DSCR, and prefer to see at least a 1.0 ratio — though deals below 1.0 are reviewed case-by-case with adjusted terms. Part of underwriting is also confirming the property can legally operate as a short-term rental in its market, so be ready to provide any required permit, and always know the property’s fallback long-term rent.
Step 4: Submit and Get Your Terms
The documentation is light — no tax returns, no W-2s. You’ll provide the property details, the STR income data, entity documents if closing in an LLC, and reserves. We lend up to 80% LTV on a purchase and 75% on a refinance, with no minimum credit score; a lower score adjusts your terms, not your eligibility.
Step 5: Close and Operate
With the property’s income carrying the file, you close fast — often in your LLC — and get 30-year fixed financing on a property you run nightly. If you bought and renovated with short-term money like hard money or a fix and flip loan, you can refinance the stabilized STR into a DSCR loan and pull capital back out through a cash-out refinance.
Airbnb Financing at a Glance
Airbnb Financing at a Glance
Frequently Asked Questions
Yes. We qualify the loan on the property’s short-term rental income rather than your personal income, so there are no tax returns or W-2s.
From projected STR market rents via data platforms like AirDNA, or from 12 months of actual booking history if the property has it. That income goes into the DSCR calculation against the proposed payment.
There’s no minimum credit score. We pull a hard credit report, but a low score is offset with more conservative terms, not a denial. The STR income carries the underwriting.
Yes — part of underwriting is confirming the property can legally operate as a short-term rental in its jurisdiction. We’ll ask for any required permit and recommend knowing the fallback long-term rent.
A true zero-down purchase isn’t realistic since we lend up to 80% LTV, but on the BRRRR path you can recoup your cash by refinancing the stabilized rental and pulling capital out.