There is a lot of buzz and excitement about Short Term Rentals right now. Especially in Nashville. I'm getting further into this niche though because I'm genuinely really interested in it and have been able to utilize a lot of the things I'm good at in the process. (that being design, high standards of quality and helping craft a great experience for the people staying in my STRs. If you want to have a successful STR, focus on the guest's experience is top priority)
I'm an agent here in Nashville with Village. I know of some awesome STR opportunities that are coming up, some of which might not even make it to the MLS before they get scooped up. I also have resources for design/furnishing and management on the back end if you needed or wanted that as well. If you're interested in having a conversation about STRs here I'd love to connect with you and share any insight I have/what I've learned with you! Even if you and I don't end up working together I'd love to help point you in the direction of what's right for you.
If you're interested in chatting more about this and hearing more about what's available send me a DM and let's connect!
@Tim Bergstrom hey Tim. What sort of financing would someone typically need to purchase a STR property? Is it any different than a 25% conventional loan?
@Lauren Milam Great question. That is one of the challenge aspects of STRs right now is that most banks won't lend on properties that are strictly STR as an "investment property". Banks will want to see 2 years of STR income before considering the income viable for offsetting your DTI. They will do it as a primary or secondary residence, and I have heard of smaller or private lenders willing to lend on one as investment property financing (which to also answer your question yes, 25% conventional investment loan would most likely apply).
But in short, the financing aspect is one of the more challenging aspects. There are probably other financing guys on BP or elsewhere who may be able to answer your question better than I can. But that has been what I have seen. There are definitely still ways to get it done, they'll just be a more creative route.
@Tim Bergstrom thanks! I was thinking it must be a tad more complex. Thanks for your explanation. I’ll do some research and find out more!
@Lauren Milam No problem! DM me if you have any other questions or want to discuss more.
@Tim Bergstrom "most banks won't lend on properties that are strictly STR as an "investment property"". Hrmmm.........
@John D. Perhaps I should rephrase what I meant by that. In my experience, a bank will definitely lend on a STR but you won't be able to offset the DTI from the projected income until 2 years of proven income are shown.
I checked out your profile and it looks like you have a good bit of experience. What has been your experience with getting financing for STRs?
If a short-term rental is both common, and the highest and best use, then many banks will allow the short term rental income prior to having 2 years rental income on income taxes. You may need to work with a local bank, or an originator with lots of local experience and knowledge.
More often then not though when we are talking about a bank lending on a property, it is for it's purchase (not a post-purchase transaction). In that case they will normally factor in the properties long-term rents, add in a local discount percentage, estimate expenses, and add that to your DTI calculation. Although again in some areas, they will base this off of other short-term rental comps.
We have short term rental financing portfolio money.
@Stephanie P. awesome! I just sent you a DM.
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