Short Term Rental Loans | Easy Street Capital (original) (raw)

Where do you lend on Short Term Rentals?

We lend in every state except for Nevada, North Dakota and South Dakota. We will rent in smaller and non-traditional markets within every eligible state.

What type of Loans are Easy Street Capital’s Short Term Rental Loans

Easy Street Capital’s STR Loans are part of its DSCR Loans program, specific terms and structure can be found here on our EasyRent (DSCR) Loan Page!

Do You Do Short Term Rental Loans on Rural Properties?

Yes, rural properties are eligible for Easy Street Capital STR Loans, however the LTV (loan-to-value) Ratio will be limited to 70.0%

I’m looking to purchase a vacant home and turn it into an Airbnb, is this eligible under the EasyRent program?

Yes, properties currently operating under any use are eligible, including vacant properties, someone’s home, or properties already operating as an Airbnb or vacation rental.

How much do I need to put down for a down payment if I'm purchasing?

A minimum down payment of 20% is required for a Short Term Rental Loan from Easy Street Capital. While this is more than the 10% required for a “Second Home Loan,” there are much fewer restrictions on the use of the property if using a DSCR Loan, including no limits on days it can be rented.

Can I use Airbnb income to qualify for mortgage?

Yes, for short term rental loans (or Airbnb loans) from Easy Street Capital documented income from Airbnb (or other similar sites like VRBO or independent booking platforms) can be used to qualify!

What's the difference between Short Term Rental Loans and AirBNB Loans?

Generally there is no difference between Short Term Rental Loans and AirBNB loans, as both are mortgage loans secured by investment properties that rent out on short stays. In recent years, many Airbnb investors have begun using the term “short term rental” instead of “Airbnb” and leasing their Airbnb property on multiple additional platforms, such as VRBO or their own personal booking site.

I am looking to purchase in a dedicated vacation market that is centered around specific seasons, is this okay?

Yes, we are happy to lend in areas that are dedicated “vacation towns” that have seasonal variations in revenue and when most comparable properties are also vacation rentals (i.e. ski or beach towns). Some DSCR Lenders have market restrictions such as only lending on short term rentals in markets that have 65% or greater occupancy (per AirDNA) or are not defined as rural, however Easy Street Capital has no such restrictions!

Can a DSCR Loan be used for Airbnb?

Yes! Our short term rental DSCR Loans fully allow properties that are rented on Airbnb, either solely, or on multiple short term stay rental platforms. Easy Street Capital does not require properties to have long-term leases

What does STR mean in mortgage lending?

STR stands for “Short Term Rental” or generally, properties that are on platforms such as AirBNB or VRBO and have tenants stay for periods of fewer than 30 days

I have partners in an LLC with split ownership of the property, is that okay?

Yes – in fact we recommend borrowing through an LLC (however borrowing as an individual is OK in most states). We require a full guaranty for anyone who has more than 25% of ownership of the entity and allow up to four separate guarantors on each Airbnb loan.

What is the minimum credit score for an Airbnb Loan with Easy Street Capital?

We will originate vacation rental loans with qualifying credit scores with a minimum of 640.

How is DSCR calculated for a short term rental loan with Easy Street Capital?

We calculate DSCR by taking monthly Projected Income (Rent or STR income) divided by your monthly payment – PITIA (principal, interest, tax escrow, insurance escrow and any HOA dues). No expenses besides taxes, insurance or HOA dues are considered in underwriting or qualification.

The property I am looking to finance does not have 12 months of STR operating history, will I still be able to get a loan and calculate DSCR?

Yes, in these cases, the Revenue portion of DSCR can be determined by the long-term rental market rent as determined by a third-party appraiser. In certain cases (based on experience and other factors), we can use data projections from reliable sources such as AirDNA or an appraisal-determined market rent based on short term rents or medium term rents instead of long-term rents.

What is Airbnb DNA?

AirDNA is a data company that analyzes airbnbs and short term rentals to provide projected average daily rates, occupancy percentage and monthly revenues for any eligible address! Check out our free AirDNA “Rentalizer” tool on this page above and check out more on airdna.co!

Does Easy Street Capital use AirDNA to qualify STR Loans?

Yes, Easy Street Capital is one of the few DSCR Lenders that use AirDNA data to qualify for AirBnb loans and pioneered the practice! Additionally, while most DSCR Lenders will use only a portion of the AirDNA projected revenue (generally 20% less than whats projected), Easy Street Capital’s vacation rental loans will use 100% of the projected AirDNA revenue if you qualify as a “Professional STR Investor.”

How do you qualify as a Professional Short Term Rental Investor with Easy Street Capital?

Easy Street Capital defines professional STR investors as investors that have three or more successful short term rental properties in the United States, each with at least 12 months of documented rental activity. Additionally, we will consider someone a professional STR investor in a specific market if they have just one successful short term rental property in the same market (with a year or more of history)

What is the minimum DSCR for an Airbnb loan from Easy Street Capital?

We will originate short term rental loans with a minimum DSCR of 0.75x.

What is the maximum number of units for a property that can be financed with a short term rental loan?

While most DSCR Lenders will limit vacation rental loans to a maximum of four units, Easy Street Capital provides short term rental loans for properties up to 10 units!

Can I refinance by Airbnb with a short term rental loan before owning the property for a full year?

Yes, Easy Street Capital’s short term rental lending program is unique in that we allow refinances (including cash-out refinances) without requiring documentation of a full year of operating history. We will utilize AirDNA or market rent projections to qualify and calculate the DSCR. The only requirement is that the property be fully up and running on Airbnb or similar platform, and you provide documentation of the listing and at least one completed booking.

What is “AirBnBRRRR”?

AirBnBRRRR is a twist on the popular “BRRRR Method” of real estate investing, where instead of buying a property that is already operating as a short term rental or Airbnb, or one that is fully turnkey and ready to rent immediately, the investor buys a property in need of renovations and rehab, and then once the property is restored to top condition, it is listed as a short term rental and any debt is refinanced into a long-term, lower-rate loan.

My Short Term Rental is a condo, is that eligible?

Yes, we lend on condos with loans consistent with our standard structure and rates, including both warrantable and non-warrantable condo projects. There are some limits on LTV and DSCR based on the characteristics of the condo structure. HOA dues are included in the PITIA payments when calculating the DSCR ratio.

What is a Condotel?

A Condotel is a condominium building with condo units that are exclusively or primarily utilized by investors as short term rentals. It shares similar characteristics as a hotel with similar amenities and management structure, but unlike a hotel, units are individually owned by investors.

What is a Condotel Loan?

A condotel loan is a mortgage loan in which the collateral is a condotel unit. Condotel loans are typically also short term rental loans.

Does Easy Street Capital do Condotel Loans?

Yes! Unlike many other DSCR Lenders that offer STR Loans, Easy Street Capital offers loans on condotels as part of the Short Term Rental Loans program!

If I get a Vacation Rental Loan from Easy Street Capital can I ever stay in the property?

DSCR Loans have strict rules against owners occupying the mortgaged properties, however, limited use is allowed, generally no more than 14 days per year.

What is a Medium Term Rental Loan?

A Medium Term Rental is generally a property that is leased for terms greater than thirty days but less than a full year, in between a short term rental and long-term rental. Medium Term Rental Loans are offered by Easy Street Capital through our DSCR Loan program, and can be qualified flexibly on a case-by-case basis, but similarly to our short term rental loan process.