Can I Buy Vacation Rental Property Using A DSCR Loan?
Welcome to NSS Lending! We understand your desire to create unforgettable experiences through short-term rentals. Whether it's a charming ski villa, a cozy beach cottage, or a vibrant city dwelling, we're here to guide you every step of the way. With our dedication to helping you secure the DSCR financing you need, your vacation rental dreams are within reach. Let's embark on this exciting journey together!
Long-Term
DSCR Loans
for Short-Term Vacation Rental Property
We Make It Easy
To Finance
Your Dream Property
30-Year fixed
Interest-only options
Minimum credit score on purchase 620
Minimum credit score on refinance 660
Minimum DSCR .75
What should I be asking myself when investing in short-term vacation rental property?
LEGAL & ZONING RULES
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Are short-term rentals (STRs) legally allowed in this specific city, county, and neighborhood?
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Does the local municipality require an operating license, safety inspection, or tax registration?
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Are there homeowners association (HOA) or condo board rules that ban or restrict short-term leasing or minimum stay lengths?
FINANCIAL PERFORMANCE
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What is the verifiable gross rental income and occupancy rate from the past 12 to 24 months (if previously rented)?
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What is the cost of furnishing (if new acquisition) the rental and how long will it take to recoup the initial investment. For example, it cost $35,000 to furnish the home. It will generate an additional $2000 per month over long-term market rent. If all $2000 was applied it would take around 17 1/2 months (or longer) to break even.
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What is the projected net operating income (NOI) after factoring in local property taxes, insurance, utilities, internet and platform booking fees and does it actually make sense to do short-term rental or would a long-term tenant be just as profitable without the added expense of furnishing the property?
How is the DSCR calculated for a vacation rental property?
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For newly acquired or unestablished properties, we utilize projected revenue from AirDNA to project gross monthly earnings. Depending on whether or not you're new to the short-term rental business or a seasoned owner, we will lend 75% to 100% of AirDNA projected revenue.
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If the property has operating history, income is validated using 12 consecutive months of historical payout statements from Airbnb, VRBO, HomeAway or property management reports.
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In cases where short-term rental projections or history aren't eligible, standard long-term market rent determined by an appraiser in the 1007 report will be used.