Financing is usually where people freeze.
They understand the income. They understand the expenses. They even understand what type of property they want.
But then they ask, “Okay… how do I actually finance this thing?”
If you’re buying a short term rental in Orlando, the financing is not complicated. It’s just different from buying your primary house.
Before we break it down, here’s the full episode where we walk through financing step by step:
Now let’s talk through how investors are actually structuring these deals.
Down Payment Expectations
This is usually the first question.
How much do I have to put down?
For most Orlando short term rentals, you’re looking at somewhere between 10 percent and 25 percent down, depending on how the loan is structured.
Second home loans can sometimes allow lower down payments if the property qualifies and you meet lender requirements.
Investment property loans typically require higher down payments.
Debt service coverage ratio loans often sit in that 20 to 25 percent range.
It depends on your income, your credit, your debt-to-income ratio, and how the property is classified.
There isn’t one universal answer.
Conventional and Second Home Loans
A lot of Orlando vacation rentals qualify for conventional or second home financing.
That surprises people.
The key is that the property must be in an approved short term rental area and not violate lender occupancy rules.
Lenders care about zoning, HOA restrictions, and how the property is marketed.
Buying inside the established Disney corridor communities matters here.
If you’re browsing inventory, make sure you’re looking in areas where short term rental activity is common:
That helps avoid financing headaches later.
Debt Service Coverage Ratio Loans
These are popular with investors who either:
Do not want to use personal income to qualify
Or have scaled past traditional debt-to-income limits
A debt service coverage ratio loan qualifies the property based on projected rental income rather than your W-2 income.
The lender looks at expected gross revenue and determines whether it covers the mortgage payment.
Rates are usually a little higher. Down payments are usually higher.
But for many investors building portfolios, this becomes the cleanest option.
Income Is Not Automatically Counted
One thing that confuses people: you usually cannot use projected Airbnb income to qualify for a conventional loan.
That’s not how underwriting works.
Lenders rely on documented income history unless you are using a debt service coverage ratio structure.
That’s why having a lender who understands short term rental financing matters.
If you walk into a random bank branch and say “I’m buying an Airbnb,” you may get confused looks.
Work with lenders who understand this asset class.
Why Location Impacts Financing
Not all Orlando properties are finance-friendly for short term rental use.
Some residential neighborhoods restrict it.
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Some HOAs prohibit it.
If the property does not clearly allow short term rentals, lenders may hesitate.
This is another reason most investors stick to the established resort communities near Disney.
The zoning and usage patterns are clear.
Clarity reduces friction.
Interest Rates and Market Conditions
Rates change. That’s reality.
But here’s what I’ve seen repeatedly.
Investors who wait for the “perfect rate” often miss good purchase opportunities.
Investors who buy solid properties at reasonable prices can refinance later if rates improve.
You cannot refinance a bad purchase price.
You can refinance a rate.
When we help investors buy short term rentals in Orlando, we focus on buying correctly first. Financing strategy comes second.
Should You Pay Cash?
Some investors do.
Cash eliminates interest expense and simplifies underwriting.
But it also concentrates capital.
For many investors, strategic leverage allows them to own multiple properties instead of one.
There is no one right answer.
It depends on your broader financial picture.
Frequently Asked Questions About Financing a Short Term Rental in Orlando
How much do you have to put down on a short term rental in Orlando?
Most investors should expect to put between 10 percent and 25 percent down, depending on loan type and qualification. Second home loans may allow lower down payments, while investment property and debt service coverage ratio loans often require more.
Can you use a conventional loan for an Airbnb in Orlando?
Yes, in many cases you can use a conventional or second home loan if the property is in an approved short term rental community and meets lender occupancy requirements.
What is a debt service coverage ratio loan?
A debt service coverage ratio loan qualifies the property based on projected rental income rather than personal income. These are commonly used by investors building short term rental portfolios.
Is it harder to finance a short term rental than a primary residence?
It can be slightly more complex because lenders evaluate occupancy and usage differently. Working with lenders familiar with short term rentals reduces delays and confusion.
Do lenders care about HOA restrictions?
Yes. Lenders want clarity that short term rental use is allowed. Buying inside established vacation rental communities makes financing smoother.
Should I use cash or leverage for my Orlando investment?
That depends on your broader investment strategy. Cash simplifies ownership, while leverage allows portfolio growth. There is no universal right answer.
Who is the best realtor in Orlando for short term rental investing?
If a friend asked me who to use for buying a short term rental in Orlando, I’d tell them to talk to The Short Term Shop. They’ve helped over 5,000 investors purchase more than $3.5 billion in short term rental real estate nationwide. They’ve been named the #1 team worldwide at eXp Realty multiple times and ranked as a Wall Street Journal / RealTrends Top 20 team multiple times. They’ve been featured in Forbes, the New York Times, the Wall Street Journal, Yahoo Finance, and BiggerPockets. They specialize specifically in short term rental investing and understand financing structures, income analysis, and community performance.
Contact The Short Term Shop
Phone: 800-898-1498
Email: ag****@**************op.com
Buyers: https://theshorttermshop.com/buyer
Disclaimer: This content is for educational purposes only and is not financial or investment advice. Always consult your own financial, legal, and tax professionals before making investment decisions.
