How One Lender Used AirDNA to Catapult their DSCR Loans

 "We looked back at the last 25 short-term rental loans we’d done and compared their actual earnings to what AirDNA projected, and it was shockingly close — it came within 0.4%.”

Easy Street Capital is a national private lender headquartered in Austin, Texas, specializing in hard money, DSCR (with an emphasis on short-term rental loans), and ground-up construction. As for size, Easy Street recently hit $1B in year-to-date loan originations for the second year in a row. They’ve done over 350 short-term rental loans valued at $200M all in just 18 months since starting their program. 

In 2021, before getting to this point, Easy Street had successful lending programs set up for fix & flips and traditional investment loans, but they had one glaring opportunity: short-term rental loans.  

They knew there was major untapped demand for short-term rental loans, but hadn’t quite found a way to build out the vertical.

What Issues Did Easy Street Face Pre-AirDNA? 

Easy Street initially noticed they were missing out on an opportunity in 2018 when debt-service-coverage-ratio loans really began to explode. 

Rather than using traditional criteria such as an individual’s credit score and income, DSCR loans allowed borrowers to leverage the income-earning potential of a home. 

The problem, however, was that Easy Street and others were trying to use long-term rental data to support lending decisions. Which, especially in top vacation rental markets, was often a fraction of what the home would actually earn as a fully-optimized short-term rental. 

Coupled with skyrocketing home values, this put Easy Street in a tough spot — they had three options:

Deny loan requests outright due to overly conservative long-term rental projections.

Require significantly larger downpayments of 30%-40%

Tell investors they’d need 12 months of historical operating income before qualifying.    

We needed a reliable data source and revenue projector so we could feel comfortable with the risk and underwriting properties as true short-term rentals.

What Did AirDNA Provide for Easy Street Capital?

Once they discovered AirDNA, they did their due diligence before pulling the trigger. 

This was a huge turning point for both Easy Street and the industry as a whole. They presented AirDNA data with this track record to the secondary markets and it spoke for itself — investors and aggregators were immediately interested.  

Quote: “It was a really big turning point for us when the secondary markets got comfortable using AirDNA to underwrite short-term rental loans because the data was so accurate.”

Easy Street signed on and tapped into the Rentalizer, the Airbnb calculator tool. Easy Street uses Rentalizer to enter any address, anywhere in the world, and see its projected revenue, occupancy, and daily rate as a full-time short-term rental. They use those results in conjunction with the market grades to make lending decisions. 

In addition, they also use the API as a customer-facing widget for their site visitors. Those interested in getting a short-term rental loan from Easy Street can quickly enter a property address to gauge the outlook for their property. 

Over the last couple years we’ve kept using AirDNA to underwrite the short-term rental loans and it has continuously shown to be incredibly accurate, allowing us to consistently lend on vacation rentals.

Learn more about our tool for investors and lenders here

AirDNA has helped solidify short-term rental DSCR loans as a reliable, consistent loan program for Easy Street. 

Since signing on with AirDNA, Easy Street now processes roughly 20 short-term rental loans per month — and has done about 350 since January 2022. 

More importantly, Easy Street also boasts a 0% default rate on its short-term rental loans. In other words, not a single short-term rental loan underwritten by AirDNA data has failed to earn its projected revenue potential and make loan payments. (Industry averages for DSCR loans are around 3%-4%). 

This impressive metric undeniably validates AirDNA (and STR projections overall) to be a sufficient underwriting technique for short-term rentals.

It goes to show — people are still worried saying “AirDNA is this new tool, it’s too aggressive” — and that continues to not show up in the delinquency figures. 

Discover how Easy Street Capital used AirDNA to confidently underwrite short-term rental loans and scale their DSCR program.

How One Lender Used AirDNA to Catapult their DSCR Loans

How One Lender Used AirDNA to Catapult their DSCR Loans

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