How to Structure a Loan for a High-Cashflow Airbnb Property (with Sample Scenarios)

If you want your short-term rental to perform like a business, you’ve got to treat it like one — starting with how you finance it. A loan isn’t just a means to an end. It can shape your monthly cash flow, tax write-offs, and growth strategy.

Here’s how to structure a loan that maximizes profit — with sample numbers to prove it.

1. Match the Loan to the Property’s Income Profile

Buying a 3-bed beach house with 80% occupancy? It can likely support a more aggressive loan structure than a downtown condo with sporadic bookings.

Pro Tip: Use AirDNA or actuals to calculate:

• Average monthly gross income
• Total monthly expenses (mortgage, taxes, insurance, utilities, mgmt)
• Net cash flow target

Aim for at least $500–$1,000/month net cash flow after all costs.

2. Know Your Loan Options

Here’s a sample breakdown for a $600K Airbnb in St. Augustine:

Option A: DSCR Loan

• 20% down ($120K)
• Rate: 7.5% (interest-only)
• Monthly Payment: $3,000

Option B: Conventional Loan

• 15% down ($90K)
• Rate: 6.75% (P&I)
• Monthly Payment: $3,200

Option C: HELOC-funded purchase

• 100% finance (from HELOC on another property)
• HELOC Interest: 8%
• Monthly Payment: $4,000

If the property nets $6,000/month, your cash flow looks like:

• DSCR: $3,000 net
• Conventional: $2,800 net
• HELOC: $2,000 net

Each loan serves different goals — max leverage vs. best rate vs. speed/flexibility.

3. Factor in Loan Costs & Prepayment Penalties

Don’t just focus on monthly payments. Ask:

• How many points to close?
• Is there a prepayment penalty if I sell or refi?
• Can I recast if I pay down principal?

4. Always Model with Startup Costs

Include:

• Furnishing ($10–$30K)
• Repairs & upgrades
• Closing costs
• First month utilities, subs, and team setup

Use our free STR deal analyzer to plug in different loan scenarios and see how it affects your cash-on-cash return.