Question 1

What DSCR do I need for an Airbnb investment loan?

Accepted Answer

Most DSCR lenders require a minimum DSCR of 1.25, meaning the property's net operating income must exceed annual debt payments by at least 25%. A DSCR above 1.5 can qualify you for better terms including lower down payments (as low as 10% versus the standard 20-25%) and more favorable interest rates. Some lenders accept DSCRs as low as 1.0 with compensating factors like a larger down payment or strong credit score.

Question 2

How does AirROI calculate DSCR?

Accepted Answer

AirROI calculates DSCR by first deriving Net Operating Income from 50 comparable properties in your market (projected revenue minus your inputted operating expenses), then dividing by your annual debt service (mortgage payments based on your purchase price, down payment, and interest rate). Every input is transparent -- you can verify the comparable properties and adjust assumptions. This property-level data is what DSCR lenders use to underwrite loans.

Question 3

Can I use projected Airbnb revenue for a DSCR loan application?

Accepted Answer

Yes. DSCR lenders routinely accept projected STR revenue for loan qualification. Many lenders use third-party revenue estimates (from tools like AirROI, AirDNA, or local comparables) as part of their underwriting. AirROI's transparent methodology -- showing 50 comparable properties with actual performance data -- provides the documentation lenders need. Some lenders also accept 12-24 months of actual STR income history if the property is already operating.

Question 4

What is the difference between DSCR and DTI?

Accepted Answer

DSCR (Debt Service Coverage Ratio) measures whether a property's income covers its debt payments -- it qualifies you based on the property. DTI (Debt-to-Income Ratio) measures your personal debt obligations against your personal income -- it qualifies you based on your finances. DSCR loans are ideal for investors scaling beyond 4+ properties, self-employed borrowers, or anyone whose personal income does not reflect their investment capacity. Traditional DTI-based mortgages typically limit investors to 4-10 financed properties.

Question 5

How can I improve my DSCR to qualify for better loan terms?

Accepted Answer

Three primary strategies: (1) Increase revenue -- optimize pricing, improve listing quality, add amenities. AirROI's comparable data shows what top-performing properties in your market earn. (2) Reduce operating expenses -- self-manage instead of hiring a property manager (saves 20-25%), negotiate cleaning costs, shop insurance. (3) Increase down payment -- a larger down payment reduces debt service, directly improving DSCR. Use AirROI's calculator to model different scenarios and find the combination that reaches your target DSCR.