Using a DSCR Loan to Finance an Airbnb or VRBO in Scottsdale
The short-term rental (STR) market in Scottsdale is a massive opportunity for investors. But financing an Airbnb or VRBO with a conventional loan can be difficult. Lenders often don't like the "non-traditional" income. This is where the DSCR loan shines.
The STR Investor's Best Tool
A DSCR loan is the perfect product for financing a short-term rental because it's designed to qualify the property, not the person. Instead of asking for your personal tax returns, we simply ask: "Does this property have the potential to cash flow as a rental?"
Using Projected Income to Qualify
For a new Airbnb purchase, you don't have an income history. That's fine. We use an appraiser's "short-term rental analysis" (often using data from services like AirDNA) to determine a property's projected gross monthly income.
If that projected income is enough to cover the new mortgage payment (PITI), the loan is approved. It's that simple.
Why This is Ideal for Scottsdale:
- Higher Income Potential: STR income in prime Scottsdale locations often far exceeds what a long-term tenant would pay. A DSCR loan allows you to use this higher projected income to qualify.
- No Personal Income Needed: Your W-2 or self-employment income is not a factor. Your qualification is based on the quality of the investment deal itself.
- Scale Your Business: You can use DSCR loans to acquire multiple STR properties without hitting the limits imposed by conventional lenders.
Found your next Airbnb in Old Town or North Scottsdale? Send me the details. Let's run the DSCR numbers and get your next investment funded.
Jonathan Moses
Senior Loan Officer | NMLS #2064741
This guide was prepared by Jonathan Moses (NMLS #2064741), the senior loan officer and founder of Roadrunner AZ Lending. With years of experience in the Phoenix and Scottsdale markets, Jonathan is dedicated to providing expert, transparent advice. Learn more about Jonathan.