Why DSCR Loans Are the Best Financing Option for Short-Term Rentals
Maximizing Cash Flow with Short-Term Rental Loans
Real estate investors are increasingly turning to short-term rentals (STRs) to maximize cash flow and boost returns. However, many find that traditional mortgage loans create obstacles when trying to scale a profitable STR portfolio.
That’s where DSCR loans for short-term rentals come in. Unlike conventional loans, Debt Service Coverage Ratio (DSCR) loans allow investors to qualify based on their property’s rental income rather than their personal debt-to-income (DTI) ratio. This flexibility enables investors to expand their Airbnb, Vrbo, and vacation rental businesses without the limitations imposed by traditional financing.
The Challenges of Conventional Loans for Short-Term Rentals
Traditional financing presents several challenges for STR investors:
LLC Borrowing Restrictions
Many investors hold rental properties under an LLC for asset protection, but conventional loans do not allow borrowing under a business entity.
Debt-to-Income (DTI) Limits
After acquiring multiple properties, investors often fail to meet traditional DTI requirements, preventing further expansion.
Loan Limits on Investment Properties
Fannie Mae and Freddie Mac restrict financing to 10 properties, limiting an investor’s ability to scale their portfolio.
Underwriting Challenges
Traditional lenders often undervalue short-term rentals by using long-term rental income projections, which do not accurately reflect actual STR earnings.
Why DSCR Loans from XITLoan Are the Best Choice for STR Investors
DSCR loans remove these barriers by qualifying borrowers based on rental income, not personal income or DTI ratios.
Short-Term Rental Income Projections
We use AirDNA rental data to qualify properties, ensuring financing is based on accurate market projections, not conservative long-term rental estimates.
Financing in Top Vacation Markets
We lend in high-demand vacation rental destinations like Destin, FL and Nashville, TN—not just major metro areas.
Flexible Rental Strategies
We support medium-term rentals (30-60 day stays) in addition to STRs, helping investors optimize occupancy rates and increase revenue.
No DTI or Loan Limits
Unlike conventional financing, DSCR loans allow unlimited investment properties, making it easier to scale your real estate business.
Partner with XITLoan to Scale Your STR Business
At XITLoan, we offer more than just financing—we provide market insights, investment strategies, and flexible lending solutions tailored for STR investors.
Contact us today to learn how our short-term rental loans can help you grow your portfolio!