Loan comparison
STR vs LTR DSCR financing in Michigan
Reviewed by Loan Daddy LLC editorial team · Updated
Quick answer
Long-term rental (LTR) DSCR loans qualify on a lease or market rent and are the most widely available. Short-term rental (STR) DSCR loans can count nightly-rental income, but only where Michigan local rules allow investor-owned STRs, and lenders often discount seasonal revenue. When in doubt, test the deal on long-term rent first.
Side-by-side comparison
| Long-term rental DSCR | Short-term rental DSCR | |
|---|---|---|
| Income source | Lease or appraiser market rent | Booking history or STR income projection |
| Local rules | Rental registration and inspection where required | STR zoning and licensing, which vary widely in Michigan |
| Seasonality | Minimal | Significant in lake and resort areas |
| Operating costs in ratio | Taxes, insurance, HOA | Often an expense factor plus higher insurance |
| Lender availability | Broad | Narrower; program-specific |
Michigan-specific factors
Grand Rapids limits short-term lodging to owner-occupied homes, so an investor-owned whole-home STR there is generally an LTR deal. Ann Arbor restricts non-owner-occupied STRs to mixed-use districts. Up north, township rules decide. A property that only works as an STR is a riskier financing candidate than one that also works as an LTR.
Read more on short-term rental DSCR and Northern Michigan rentals.
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