The Quick Read: Lenders convert a condotel’s income into one steady monthly figure by adding up twelve consecutive months of documented, unit-level revenue and dividing by twelve. The number you present decides the number they use, so the file has to show one clean, reconcilable annual total. Select lenders in Lendmire’s wholesale network look for operating history, proof of rental permission, and statements that tie to bank deposits.
- Twelve straight months of statements for your unit beat a single strong season or a projection.
- Gross revenue and net-to-owner are different numbers. Know which one your statements show.
- Weak and zero months stay in the average. Lenders do not skip them.
- Short-term rental (STR) purchases run up to 75% LTV on the strongest files, with a 1.00 coverage floor on purchases.
- Every file is underwritten individually, subject to lender guidelines, and none of this is a commitment to lend.
A condotel is a condo unit in a building that runs like a hotel. You own the unit, but a front desk, a rental program, or a manager often handles the guests. That setup changes how income gets documented. This guide walks through what lenders want to see and how to package it.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The complete DSCR loans guide covers the basics.
Key Terms Defined
Condotel: A condo unit in a hotel-style building where the owner holds title and a rental program or manager often handles guests.
Trailing 12 months (TTM): The most recent twelve months of income, laid out month by month.
Annualize: Add up twelve months of revenue and divide by twelve to get a steady monthly figure.
Gross revenue: Everything guests paid for the unit before fees, splits, and expenses come out.
Net-to-owner: What lands in your account after the resort, manager, or rental pool takes its share.
Haircut: A discount a program applies to gross receipts to account for operating costs.
DSCR: Debt service coverage ratio, meaning rent used for lender review divided by the full monthly obligation (principal, interest, taxes, insurance, and HOA dues).
Why Is Condotel Income Read Differently From a Normal Rental?
Condotel income is read differently because the building’s operation, not just your unit, controls the cash. Revenue can pass through a rental pool, a manager, or your own listing, and each channel leaves a different paper trail. Standard rent schedules also do not fit nightly income.
Agency lenders avoid the category entirely. Fannie Mae’s Condo Status Finder says it cannot finance projects that operate as a hotel or motel or that manage daily or short-term rentals. DSCR loans are not agency products, so the building’s operation shapes the file instead of ruling it out. Eligibility still depends on the specific program.
The appraisal does not settle your income either. Fannie Mae’s June 2024 Appraiser Update says Form 1007 asks for monthly market rent from monthly-lease comparables. It calls it incorrect to take STR comps and multiply the nightly fee by 30. The same update says Form 1007 cannot estimate a STR’s nightly fee. Appraisers value the real property. Underwriters decide how to count the income.
What Are the Three Numbers You Might Have?
You may hold up to three figures: platform gross, operator-reported gross, and net-to-owner. Lenders and programs differ on which one counts. Your job is to know which basis each statement uses and to say so plainly in the file.
| Figure | What it includes | What to watch |
|---|---|---|
| Platform gross | Guest payments through Airbnb or VRBO | Fees and splits sit outside it |
| Operator gross | Total room revenue from the manager or pool | May be pooled across units |
| Net-to-owner | Your distribution after resort and fees | Often far below gross |
The gap can be large. In one St. Pete condotel discussion on BiggerPockets, the owner describes the resort and fees keeping roughly two-thirds of room revenue. Gross and net are not interchangeable. A coverage ratio built on gross when the program counts net will overstate your position, and the underwriter will catch it.
How Does Annualizing Work, Step by Step?
Annualizing takes five moves: collect twelve months, sum them, divide by twelve, apply the program’s haircut or factor, and compare the result to the full payment. The output is your rent used for lender review. Here is the sequence a clean file follows.
1. Identify who collects the money. A rental pool distributes net proceeds. A manager runs the unit on its own. Or you self-list where the building allows it. As one commenter in a Maui condotel thread notes, some condotels force a pool and others allow private management.
2. Assemble twelve consecutive months. Use platform earnings exports or the manager’s owner statements, month by month, for your unit only. If a report covers several units, break yours out. Skip spreadsheets you built yourself.
3. Reconcile to deposits. Each payout should trace to the bank account where it landed. Pull out transfers and income from other properties. Twelve months of your bank statements work as a secondary check.
4. Annualize. Sum the twelve months and divide by twelve. Apply the program’s haircut or factor. That result is the rent used for lender review.
5. Divide by the full payment. Rent used for program review over principal, interest, taxes, insurance, and HOA dues gives the coverage ratio.
Picture a ski-area condotel that books heavily from December through March. Four strong months and eight thin ones still average into one monthly figure. A lender does not take the peak and call it the run rate. That is exactly why twelve consecutive months matters: it shows the real shape of the year.
Lendmire’s documentation requirements for an operating short-term rental follow the same logic. Platform statements and bank deposits form the core of the file.
What About Seasonality and the Months That Hurt?
Seasonality stays in the math. Zero-revenue months, owner-blocked weeks, and slow shoulder seasons all count toward the twelve-month total. A strong summer cannot hide a dead winter.
There is a second effect. An annual average can clear the coverage floor while individual months fall well short of the payment. The loan is sized on the average, but you still pay every month. That is why reserves matter on seasonal units. Across the network, reserves vary by lender, leverage, loan size, and transaction type. About six months of PITIA is common. Larger loans typically step up. Treat reserves as your bridge through the slow season, not a formality.
What Does the Document Package Look Like?
A lender-ready package proves four things: the income is real, it belongs to this unit, it is permitted, and it reconciles. Each document has a job.
| Document | What it proves | Who issues it |
|---|---|---|
| Platform earnings export | Guest revenue, month by month | Airbnb, VRBO |
| Owner or pool statements | Distributions and fees taken | Manager or resort |
| Bank statements | Payouts actually landed | Your bank |
| HOA or building documents | Rental use is allowed | Association |
| Cover memo | Explains splits and dips | You |
Reconcile in a loop: platform payout to bank deposit to owner statement. Anything that does not match should be explained before the underwriter asks. A one-page cover memo works well. State which basis your statements use (gross or net), note any owner-use weeks, and explain any month that spiked or collapsed. Short, factual, no spin.
For permission, gather the condo-hotel declaration or HOA rules that allow nightly rental. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
How Do the Window Mechanics Work?
The window is the trailing twelve months before the application, and it needs to be consecutive. Calendar-year reporting is not required. A rolling twelve months works as long as every month is there.
Most STR programs in the network expect about 12 months of hosting history. That is the benchmark for documented income. A few cases bend it:
- Under 12 months of history. The file usually shifts to a projection path or a market-rent fallback, with different terms.
- Owner-use blackout weeks. Blocked nights reduce bookable nights. AirDNA’s methodology excludes host-blocked nights from occupancy, which shows why personal-use weeks need to be flagged and not buried.
- A mid-year switch from pool to self-management. Provide both sets of statements and label the changeover month.
- A unit under renovation. Closed months still count unless the program says otherwise. Disclose them.
Applying right after your strongest season can feel smart. It rarely changes the number, because the window still includes the slow months. What matters more is having a full, clean twelve.
When Is a Projection Used Instead of History?
A projection is the fallback when no operating history exists. It is a modeled estimate from nearby comparables, not your unit’s own record, so documented history is treated as stronger evidence. It is a forecast rather than realized cash flow.
AirDNA’s help center explains how its revenue calculation works: nightly rates plus cleaning fees, minus service fees and discounts, built from booked days times average daily rate. Its ADR page says ADR is a trailing-twelve-month figure that includes cleaning fees and excludes Airbnb service fees. These are modeled market numbers. Where both actual and projected figures exist, underwriting commonly leans on the lower supported amount. That is general practice, not a fixed rule.
Lendmire’s piece Can a Long-Term Rental Turned Airbnb Cash Out on Projected Income? covers the projection path in more depth.
Where Does the General Rule Break?
The annualizing rule bends in a few named situations:
- Rental pool statements. Distributions may show income net of expenses. State which basis the statement uses and confirm which basis the program counts.
- Mandatory pools. Income may be pooled and distributed by contribution, so a uniform per-unit allocation can look flat. A BiggerPockets thread on pooled vacation rentals describes this setup.
- Tax filings that differ. A condotel with hotel-style services can report on Schedule C instead of Schedule E. The University of Illinois Tax School notes that stays averaging under seven days are generally not Schedule E rentals. A DSCR file does not usually lean on traditional personal-income documentation, so this rarely blocks the loan. Tax treatment varies; consult a qualified professional.
- Agency contrast. Fannie Mae’s rental income rules lean on leases, Form 1007 or 1025, and traditional personal-income documentation for refinances. That is a different system from a DSCR file, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
What Program Numbers Apply?
Typical STR guidance across select lenders in Lendmire’s wholesale network looks like this, subject to lender guidelines and individual underwriting:
- Purchase: up to 75% LTV on the strongest files, with a 1.00 coverage floor.
- Refinance: up to 70% LTV, with a 1.00 coverage floor.
- Cash-out: up to 70% LTV on short-term-rental collateral.
- Credit: a 640 minimum score, with stronger tiers for better terms.
- Experience: about 12 months of host history.
- Loan size: up to $3,000,000 on standard programs. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. That is a separate path from the standard 1.00 floor. Clearing 1.00 is also not the same as positive cash flow. DSCR compares rent to PITIA only, so repairs, vacancy, management, utilities, and capital expenses sit outside it. Condotels also carry heavy HOA dues, which belong in the payment side of the ratio.
What Mistakes Shrink Your Number?
Most shrinkage comes from sloppy presentation, not weak performance. Watch for these:
- Multiplying the nightly rate by 30. Appraisal guidance calls it incorrect, and underwriters do not use it.
- Treating gross as qualifying income. Programs apply a haircut or factor to gross receipts.
- Using the appraiser as your income source. Underwriters make that call, a point appraiser-education provider McKissock makes as well.
- Skipping the seller’s statements. If you are buying an operating unit, the seller’s month-by-month records are your key diligence item. Ask how many months you can get.
- Handing over statements that do not reconcile. Unexplained gaps between payouts and deposits slow every review.
Frequently Asked Questions
Can I use my Airbnb income to qualify for a condotel loan?
Yes, when the unit has operating history and rental use is permitted. Select lenders in the network document it with platform or operator statements plus bank deposits. A projection applies only when no history exists, usually with different terms.
What counts as a trailing year?
It is the twelve most recent consecutive months before you apply, shown month by month for your unit. It can be a rolling window, not a calendar year. Missing months weaken the file.
Do lenders use my best month or my best season?
No. They sum the full twelve months, slow and zero months included, and divide by twelve. A strong peak cannot stand in for the whole year.
Does gross revenue count, or only what I receive?
It depends on the program. Many apply a haircut to gross receipts, and rental pool statements may already show net figures. Present the basis clearly and confirm which one the program counts.
What if I have less than twelve months of history?
The file typically moves to a projection or market-rent fallback, with adjusted terms. Documented history is stronger evidence, so waiting for a full year can improve the file.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Reach the team at 828-256-2183 or request a quote.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
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References
1. Fannie Mae Condo Status Finder
2. Fannie Mae Appraiser Update, June 2024
5. AirDNA home
6. AirDNA: How AirDNA calculates revenue
7. AirDNA: How AirDNA calculates ADR
8. BiggerPockets thread on pooled vacation rentals
9. University of Illinois Tax School
10. McKissock Learning: Form 1007 and short-term rentals
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Buy an Airbnb With a Partner Using a DSCR Loan · How to Get a Mortgage on Commission Income · Airbnb Loan With Booking History vs Without: What Changes
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.