Short-Term Rental Loans: How Airbnb Income Gets Underwritten
Short-term rentals can out-earn long-term leases, but lenders don't take projected bookings at face value. Here's how short-term rental income is typically underwritten.
Short answer
Lenders underwrite short-term rentals from booking history or a third-party revenue projection, then usually reduce gross revenue for platform fees, cleaning and seasonality. The adjusted monthly income is divided by the payment, just like a long-term rental. Programs vary widely, so where the income number comes from matters as much as the number itself.
Key points
- Income comes from booking history or a market projection.
- Expect an adjustment for fees, cleaning and seasonality.
- Not every DSCR program accepts short-term rental income.
Where the income number comes from
Lenders generally use one of two sources:
- Booking history. Twelve months or more of platform statements on the property, or on comparable properties you operate.
- Market projections. A third-party revenue estimate for the address, based on nearby listings with similar size and amenities.
Some programs fall back to the appraiser's long-term rent instead, which can sink the ratio if the property only works as a short-term rental.
The adjustment
Gross bookings aren't income. Lenders typically reduce them for platform fees, cleaning, supplies and seasonal swings before calculating the ratio. The size of the adjustment varies by program; this example uses 20%.
Deal sheet: Short-term rental, illustrative
| Amount | |
|---|---|
| Gross annual bookings | $72,000 |
| Expense and seasonality adjustment, 20% | −$14,400 |
| Qualifying annual income | $57,600 |
| Qualifying monthly income | $4,800 |
| Total monthly payment (PITIA) | $3,900 |
| DSCR | 1.23 |
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Before you buy a short-term rental
- Confirm local rules: many cities cap or ban short-term rentals, and lenders check.
- Get a revenue projection for the exact address, not a neighborhood average.
- Budget furnishing and setup into your cash to close.
- Run the deal at long-term rent too, so you know your fallback.
Short-term rentals also carry higher insurance costs, which feed straight into the payment. For the core math, see DSCR loans, explained.
Frequently asked questions
Can I use Airbnb income to qualify for a DSCR loan?
Many DSCR programs accept short-term rental income from booking history or a third-party projection, usually after an adjustment for expenses and seasonality. Not every program does, so confirm before you go under contract.
Do I need a year of booking history?
Not always. Some programs accept a market revenue projection for a property you're buying. Others want twelve months of history on the property or on similar ones you operate.
What if my city restricts short-term rentals?
Lenders typically check local rules. If short-term renting isn't allowed, the property is underwritten at long-term rent, so run your numbers both ways.
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