It’s no secret that securing Airbnb loans has remained an ongoing challenge for investors. This blog explores how services for STR investors (particularly financing and data analytics) have helped solve some of the stickiest problems for Airbnb investors—and allowed for the continued industry growth.

How Accurate Data Can Help Investors Secure Airbnb Loans

It’s hard to believe, but Airbnb is only 15 years old.

Since August 2008, the platform has helped thousands of investors across the globe build cash-flowing real estate portfolios through STRs.

The Airbnb revolution has also spawned droves of new companies and services within a burgeoning ecosystem—all designed to help STR investors achieve success (and solve problems that come with scale and growth).

Conventional Airbnb loans — limited options coming out of recession for a new industry (2008 to 2018)

DSCR loans — investment property loans for Airbnbs (2018 to 2020)

Harnessing cutting-edge data — solving the scaling problem for Airbnb loans (2021 to present)


The history behind conventional Airbnb loans

Airbnb was founded during an economic recession, like a surprisingly high number of successful companies over the last two decades. It was originally designed as a room-sharing platform and quickly attracted interest from hosts, travelers, and venture capital, transforming into a platform mainly for full-home rentals within a couple of years.

It was also at this time that the mortgage industry, which had been plagued by loose qualification and underwriting standards in the prior decade, was undergoing transformation as well. These subpar standards were partially blamed for the 2008 recession and American housing market collapse and inspired the passage of the Dodd-Frank Act in 2010 that created qualifying mortgage (QM) rules to tighten up standards across the industry.

What did this mean for the savvy real estate investors interested in Airbnb? Well, while there were many opportunities to purchase real estate at discounted prices and less competition versus today, the options for Airbnb loans were still limited. Banks and conventional mortgage lenders were approaching the new asset class rather conservatively. This, along with the new QM rules, meant many Airbnbs needed to be purchased with all cash, converted from primary residences, or financed with rental property loans (with harsh restrictions on scale, leverage, and qualification).

Low interest rates and the rebound of conventional lending allowed investors to continue to build Airbnb portfolios during the 2010s. However, many Airbnb investors still ran into trouble trying to truly scale with conventional financing. Some of these issues included:

Limits on total number of properties financed. Conventional QM rules allow a hard maximum of 10 properties that can be given to any individual.


Second home loan restrictions. These popular loans do not lend themselves to investors looking to run an Airbnb as a business. This is due to restrictions on employing property managers, the number of nights the property can be rented per year, and even restrictions on how far away from your primary residence the Airbnb can be located.


Debt-to-income (DTI) qualification. Most importantly, conventional financing options required the individual to qualify with personal income and overall financial situation. This can put a damper on investing in Airbnbs that would provide robust rental income on their own and would still not qualify if the investor’s personal debt-to-income ratio wasn’t high enough.

Fortunately, a new loan product called DSCR loans emerged on the scene around 2018 that represented the next step in the growth of the STR industry with a new breakthrough option for Airbnb loans.

Understanding the nuances of DSCR Airbnb loans

As the STR industry continued to mature, many people realized that they could become professional investors in Airbnb. In other words, it could be a legitimate full-time career instead of just a source of side income or to bolster a retirement portfolio. This professionalization of the industry meant running portfolios like a business, complete with pricing engines, technology and dedicated teams.  

However, achieving the scale needed to truly become professional Airbnb investors calls for a portfolio greater than just a handful of properties. (The numbers—“economies of scale”—only work when you have many properties under management.) Thus, a new financing option was needed due to the limits imposed by conventional lending choices.

Luckily, DSCR (debt service coverage ratio) loans entered the scene around this time. These loans are made by private lenders and do not need to follow the same QM rules that conventional loans do. The loans are also different because they are primarily based on the property and its cash flow potential, rather than personal income and expenses. Furthermore, they don’t have the same limits as conventional loans, allowing for investors to expand well past 10 properties if they’re seeking scale.

While DSCR loans were initially aimed at traditional investors of long-term rental (LTR) properties, many DSCR lenders adapted to the growing trend of investors moving to STRs for the increased cash flow potential. 

However, between 2018 and 2020, these lenders stayed fairly conservative. This meant that properties financed by DSCR Airbnb loans would need to be qualified by the projected rents they would earn—and that is only if they were utilized as an LTR or only qualifying with STR income with at least 12 months of documented operational history.

The late 2010s were a period of historically low interest rates and still-reasonable prices for properties in many markets. That’s why many investors were able to take advantage of these DSCR Airbnb loans to grow and scale portfolios.

The spring of 2020 saw a dip in the markets due to prolific restrictions imposed by governments over travel and mobility. However, the real estate market, especially for STRs throughout the vacation and secondary markets, roared back in the later half of the year and into 2021. Suddenly, despite interest rates hitting rock-bottom levels, and professional Airbnb investors ready to expand their portfolios, the availability of Airbnb loans hit yet another crossroads.  

Despite the success of many professional STRs investors in the preceding years, many lenders still required qualification for properties with an LTR track record or with more than a year of operational history. Thus, they couldn’t purchase properties for their burgeoning portfolios that would earn robust cash flow as an Airbnb—all because the same property wouldn’t function as if it were leased on 12-month terms only.

How scaling investors can use data to secure Airbnb loans

In the early 2020s, specialized DSCR lenders wanted to provide credit to scaling investors but needed an alternative method besides projected 12-month lease market rental rates.

The solution was, in theory, simple: harnessing new data sources that could accurately project expected revenues for STR properties.

Lenders that provided these Airbnb loans needed to be able to trust the projections to manage their risks and feel confident in providing loans that could be paid back with rental income cash flow. Data providers like AirDNA were a perfect fit for these lenders, as the rental projections through the Rentalizer™ Airbnb calculator proved to be accurate and up-to-date. The latter is especially important as information in real estate is known to lag, and changes in data only appear after it would be too late to adjust. Sourcing real-time projections from platforms like AirDNA made the qualification and underwriting of these Airbnb loans arguably even more accurate than traditional methods.

Starting in 2021, DSCR lenders specializing in STRs were able to effectively underwrite and qualify professionals looking to scale smartly and quickly and with maximized capital allocation. 

Additionally, as interest rates have risen since 2022, this kind of data has proven to be an invaluable tool for lenders and investors alike navigating a volatile market.  Negative trends have been spotted in markets using the real-time data, allowing investors to pull back and lenders to reduce exposure to risky markets. Also, many investors have turned to strategies such as the “BRRRR method,” which offers opportunities to purchase cash-flowing real estate by buying fixer-uppers rather than turnkey properties and prioritizes high capital turnover to earn cash flow in a high-rate, high-price market. Many investors are only able to combine the short term rental strategy with the BRRRR method by doing cash-out refinance loans qualified through STR projections. Because the BRRRR method relies on recycling cash quickly—getting Airbnb loans that require 12 months of operating history—would have made it untenable.

The Airbnb industry continues to grow and innovate rapidly. Add in an uncertain and volatile economic climate, and it has never been more important for investors to stay on top of all the tools available for success. 

Nailing the financing side of the equation—obtaining loans for your Airbnbs—is always important, and understanding how the options are changing and expanding is critical to overall success.


This article was written in partnership with Easy Street Capital, America’s leading DSCR lender. With over 500 DSCR loans funded in the last year, Easy Street has helped real estate investors across the country achieve financial freedom through this popular loan product. DSCR loans allow real estate investors to qualify with no W2, no tax returns, and no income verification.

How Accurate Data Can Help Investors Secure Airbnb Loans

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