Quick Answer
Short-term rental (STR) DSCR qualification uses either actual STR income (with 75-85% offset for vacancy/management) or market long-term rent, whichever is lower. Most lenders require 1.25+ DSCR for STR properties vs. 1.0-1.15 for long-term rentals. Conservative underwriting uses stabilized occupancy (60-70%) rather than peak-season performance to ensure DSCR resilience.
Key Takeaways
- STR income offset: Lenders use 75-85% of gross STR revenue to account for vacancy, cleaning, management
- Conservative DSCR uses 60-70% occupancy assumption, not peak-season 90%+ occupancy
- Minimum DSCR for STR: 1.25-1.35 vs. 1.0-1.25 for long-term rentals
- Market rent fallback: Some lenders use lower of STR income or long-term market rent
- Document 12+ months STR history: Proven track record improves underwriting terms
FAQ
Q: What occupancy rate should I use for STR DSCR? A: Conservative underwriting uses 50–60% occupancy. Never use platform-claimed 80–90% figures without adjusting for seasonality.
Q: Do all lenders finance short-term rentals? A: No. Many require long-term lease documentation. Seek lenders with STR-specific programs or expect 0.25–0.5% rate premiums.
Q: Can I use Airbnb income for DSCR? A: Some lenders accept platform statements with 12+ month history. Others require a long-term lease equivalent or market rent appraisal.
Next Step
Use the DSCR Calculator with conservative STR occupancy assumptions to stress-test your qualification before applying.