A DSCR loan, or Debt-Service Coverage Ratio loan, is a unique financing option that evaluates the profitability of a rental property. It does this by dividing the monthly rental income by the total debt service expenses—covering principal, interest, taxes, insurance, and association dues. This ratio helps determine if the property is generating enough income to cover its debts.

Although DSCR loans often come with higher interest rates and down payments compared to conventional loans, they offer the flexibility to include more properties under a single loan. They’re particularly beneficial for self-employed individuals and experienced investors who rely mainly on real estate investments for their income. Additionally, these loans allow borrowing through a business entity, offering a strategic way to manage and reduce risk.

Buy-and-hold investing is a strategic approach where you purchase a vacation home and maintain ownership over an extended period, potentially spanning years or even decades. This approach is especially beneficial if you buy when home prices are low, allowing you to build equity and use cash-out refinancing to venture further into the rental market.

Throughout this process, you can generate a strong cash flow from your vacation rentals, providing the capital needed to grow your portfolio. Our vacation rental loans offer 30-year terms, making them an ideal choice for those planning to keep their vacation properties long-term.