DSCR Loans
How to Finance a Short-Term Rental
Short-term rentals are usually financed with DSCR loans that use projected STR income rather than a signed lease. Because there is no lease, lenders lean harder on market data, seasonality and management assumptions.
- Pull platform revenue data for the area
- Model occupancy and seasonality honestly
- Account for management, cleaning and utilities
- Present a stabilization plan for the first 12 months
What differs from a standard rental
- Income is projected, not contracted
- Reserves are often higher
- Some lenders cap the STR income they will count
- Pricing reflects the extra volatility
Where a market supports it, an STR can outperform a long-term rental on the same purchase — but the underwriting has to show it.
Frequently asked questions
Can I use a lease for an STR?
Some lenders accept a lease plus STR history; others use platform projections.
Do I need tax returns?
DSCR-style STR loans generally do not require personal income verification.