Can I Finance a Short-Term Rental With No Rental History?

New STR investors hear “no history, no loan” from banks and assume it is true everywhere. It is not. As brokers working with a full panel of wholesale lenders — and as investors ourselves with 100+ projects behind us — here is how first-property STR deals actually get financed.

How Lenders Qualify an STR With No History

• Long-term market rent (most common): the appraiser completes a rent schedule as if the property were a standard rental, and the DSCR is calculated from that. If the deal works on long-term rent, STR upside is gravy.
• STR income projections: some lenders accept third-party short-term rental revenue data (annualized market projections for comparable listings) to qualify the property on STR income.
• Hybrid programs: a handful of lenders blend both, or apply a haircut to projected STR revenue.

What Improves Your Approval Odds

• A market where STRs are legal. Lenders check local ordinances; permit and licensing questions kill more STR loans than credit does.
• Deals that work on long-term rent. The widest lender pool qualifies you this way — underwrite conservatively and STR income becomes upside, not a requirement.
• Stronger reserves. Seasonal income swings make lenders want more months of payments in the bank.
• Entity ownership. Closing in an LLC is standard on these programs and keeps the business-purpose structure clean.

What to Expect on Terms

STR programs generally price slightly wide of standard long-term DSCR loans and may cap leverage a bit lower — the income is projected, and lenders price the uncertainty. This is exactly where broker shopping earns its keep: STR appetite varies enormously between wholesale lenders, and the difference between the right one and the wrong one is real money.

Frequently Asked Questions