STR vs LTR financing
Short-term rentals can out-earn long-term leases — but DSCR programs price the two very differently.
Two ways to earn
A long-term rental (LTR) collects a steady monthly lease. A short-term rental (STR) earns nightly, modeled as average daily rate (ADR) × occupancy × 30. STR revenue is often higher, but it is also more variable and more expensive to operate.
How lenders treat each
For LTR, lenders typically use market or in-place rent, sometimes with a small haircut. For STR, many programs average trailing income or apply a larger haircut to account for seasonality and management costs — so a big STR number does not always translate into a proportionally bigger loan.
Which to underwrite
Run both. If the STR premium survives the lender haircut and the extra operating cost, it can lift your DSCR. If not, the steadier LTR may qualify a cleaner loan. Our Rent & STR Estimator shows the two side by side.
Estimate only. All figures are estimates for informational purposes only — not an approval, commitment to lend, or rate offer. Actual terms depend on lender underwriting, credit, appraisal, reserves, and property condition.