Short Term Rental Loans
With the rise of websites like AirBnB and VRBO coupled with the ability to create your own hosting site, real estate investors have a great opportunity to own vacation rental properties. Fortunately, DSCR loans can be used to purchase or refinance properties that will operate as a short term rental (STR).
As opposed to using a long term lease, you can use the following to qualify as income for a STR investment.
- Trailing 12 months of revenue for the property validated by reports from AirbBnB/VRBO or from your professional property manager
- Market data from a provider such as AirDNA
- If available, market rents from a Form 1007 on the appraisal
The overall structure of DSCR loans are very similar between loans for a short term rental and a long term rental. One of the key differences is going to be the interest rate. Typically, short term rentals will have a higher interest rate than long term rentals.
Other than that, you can expect the following from short term rental loans.
- Up to 80% LTV for Purchases
- Up to 75% LTV for Rate and Term Refinances
- Up to 70% LTV for Cash-Out Refinances
- Loan terms include a 5/1 ARM and a 30-year fixed rate loan
- Interest-Only available in select situations
- Loan amounts starting at $100k up to $5MM
- Flexible prepayment penalty options
- Minimum FICO of 680
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3846 Paradise Bay Dr.
Gulf Breeze, FL 32563