How to Use a DSCR Loan for Short-Term & Airbnb Vacation Rentals

Short-term rentals (STRs) generate incredible cash flow, but traditional banks often struggle to underwrite them due to fluctuating seasonal income. DSCR mortgages offer the ideal financing vehicle for Airbnb and VRBO properties.

How Short-Term Rental Income Is Calculated

When underwriting a short-term rental deal, lenders typically look at rental revenue in one of three ways:

• AirDNA Projections: Interactive and automated rental market reports used for newly acquired vacation properties.
• 1007 Appraisal Market Rent Schedule: An appraiser's long-term rent survey used as a baseline safety net.
• Historical Property Performance: 12 months of prior booking history for existing short-term rentals.

Top STR States for High Cash Flow

Short-term rental investors frequently target high-demand tourism hubs. Learn more about state-specific guidelines in market leaders like Florida, Tennessee, and North Carolina.