The Quick Read: A market data report is a third-party projection of what a short-term rental at one address could earn, built from nearby comparable listings. On a VRBO cash-out refinance, it supports the income side only: the loan program decides whether it or your hosting history carries the coverage test, and the appraisal sets value.
- The report estimates revenue, occupancy, and average nightly rate. It does not measure your property’s real results.
- On a refinance of an operating rental, your platform history is often the main evidence. The report is often a cross-check.
- Select lenders in the network use it differently, so the first question is which income basis a program uses.
- Typical short-term-rental cash-out leverage tops out around 70% LTV, subject to lender guidelines.
- Clearing the coverage test is not the same as positive cash flow.
What a Market Data Report Is (and Is Not)
A market data report is a PDF projection of what your address could earn as a short-term rental. The vendor picks comparable listings near the property, weights them, and projects the next twelve months of revenue, occupancy, and average daily rate (ADR). ADR is simply the average nightly price actually earned.
Three things it is not. It is not an appraisal, because the appraisal sets the property’s value. It is not your booking history, because that is what the property actually did. It is not a promise, because it describes comparable listings and not your first-year results.
Lenders use these reports because a standard rent estimate is built for 12-month leases. A vacation rental with strong nightly pricing can look weak on that basis. The report gives the underwriter a way to see the property’s real earning profile.
What Is Inside the Report
Most reports follow the same anatomy. The table below shows what each part tells the reader and what an underwriter checks.
| Report section | What it shows | What the underwriter checks |
|---|---|---|
| Comparable listings | Nearby rentals matched on bedrooms, baths, guest count | How close and how similar the comps are |
| Projected revenue | Twelve-month gross income estimate | Whether it is gross or net of costs |
| Occupancy and ADR | Share of nights booked and average price | Whether they are realistic for the market |
| Seasonality | Peak and slow months | How uneven the year is |
| Market grade or score | A rating of the market, not the property | Demand, growth, and regulation inputs |
| Comp-set strength | Low, medium, or high confidence | How much weight the number deserves |
One detail trips up many hosts. The revenue figure is gross host revenue. It sums nightly rates and cleaning fees, then subtracts discounts and platform fees. Repairs, utilities, management, and vacancy are not in it.
How the Report Gets Built
The vendor starts at your address and pulls active listings within a set radius, often about 10 miles. It matches them on bedrooms, bathrooms, and guest capacity. Then it weights the comps and adjusts for seasonality and demand.
The projection assumes the property is available all year. That is a modeling assumption, not a forecast of your calendar. If you block off months for personal use, your actual numbers will sit lower.
The report also blends platforms. It does not split VRBO from Airbnb, so it shows one combined projection. Combined platform history can matter on the lender side for the same reason.
Where It Fits in a VRBO Cash-Out Refinance
On a purchase, there is no history, so a projection often carries more weight. A refinance is different. The property already operates, so most programs we place files with want real numbers first. Many expect about 12 months of hosting history on short-term-rental files.
That is why the report is often a supporting document on a refinance. Programs generally use one of three income bases.
| Situation | Primary evidence | Role of the report |
|---|---|---|
| 12 months of platform history | Booking exports and deposits | Cross-check or support |
| Little or no history | Market projection, where a program allows it | Main income evidence |
| Program wants long-term rent | Appraiser’s rent schedule | Often not used, or used only if it beats that figure |
Which basis applies is the program’s decision, not yours. A few lenders in the network accept a projection on a refinance. Most lean on history. Our complete DSCR loans guide covers how those programs differ in general.
Leverage matters just as much as income. Across most of the network, cash-out tops out around 75% LTV on standard rentals and about 70% LTV on short-term-rental collateral. Expect a credit score of 640 or higher on the short-term-rental side, with loan sizes up to $3,000,000 on standard programs, all subject to lender guidelines. Cash-out files also commonly expect about 6 months of seasoning.
From Report to Qualifying Income
DSCR stands for debt service coverage ratio. It compares the property’s income to its monthly obligation. The obligation is PITIA: principal, interest, taxes, insurance, and any HOA dues. A ratio of 1.00 means income equals the payment.
Here is how the report becomes a coverage figure:
1. The program picks the income basis: history, projection, or long-term rent.
2. The underwriter reads the report, including comp-set strength.
3. The projected annual revenue converts to a monthly figure.
4. The lender applies a haircut, which varies by lender, to allow for costs and vacancy.
5. The result is divided by PITIA to give the coverage ratio.
6. The ratio is checked against the program floor. For short-term rentals, that is typically 1.00 on purchases and refinances.
Run the numbers on a modeled example, not a real property. Say a report projects income at about 1.6x the payment. After the lender’s haircut, it might land near 1.25x. Now add cash-out. The new loan balance is bigger, so the payment grows, and the same income covers it less. Coverage could slide toward 1.05x. The file still clears 1.00, but with little room. These are assumptions for illustration, and each lender’s haircut and rules differ.
Stronger coverage opens better pricing and leverage. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. A larger down payment or lower leverage can lift the ratio. It never erases credit floors, reserve rules, or property eligibility. Reserves commonly run around 6 months of PITIA, though they vary by lender, leverage, and loan size.
How to Read Your Report Before the Lender Does
Pull the report yourself before you apply. Then check these items in order:
- Comp count and distance. A deep set of nearby comps beats a thin set stretched across a wide radius.
- Bedroom and guest match. A three-bedroom report built on five-bedroom comps overstates your income.
- Data period. Recent data matters. Some lenders want the report dated close to the loan paperwork.
- Seasonality. A strong summer can hide a very weak winter. Look at the slow months.
- Revenue definition. Confirm the figure is gross, then model costs separately.
- Comp-set strength. A low rating tells you the underwriter will discount the number.
Then haircut the projection yourself before you model anything. Projections describe established comps, and a new or unusual listing often earns less in its first year. Some hosts see the reverse: results that beat the report. Neither direction is a surprise to an underwriter. Compare the result to what long-term rent would produce, so you know your fallback.
When the Numbers Disagree
The report, the appraisal, and your booking history will rarely match. Here is how they usually rank on a refinance of an operating rental.
Your actual history usually carries the most weight when the program requires it, because it is documented fact. The report is secondary evidence of market support. The appraiser’s long-term rent is the floor when a program credits projected income only if it beats long-term rent.
The appraiser’s rent schedule is built for monthly leases. Fannie Mae’s appraiser guidance says Form 1007 was not designed for short-term rentals. Freddie Mac’s form instructions describe the lender obtaining market rent from the appraiser. That is why a short-term rental often needs a separate income source. DSCR loans are not governed by those agency rules. The forms matter here only because they explain why the report exists.
Value is separate. The appraisal sets it, and cash-out proceeds depend on LTV against that appraised value. A strong short-term-rental income story does not raise the appraisal by itself.
What Can Derail a File
Several things can sink a file even with a strong projection.
- Thin comps. In small or unusual markets, estimates can drift well off the real result, and underwriters know it.
- No history where a program requires it. Options narrow. Qualifying on long-term rent alone may be the fallback.
- Two-to-four-unit properties. The appraiser uses an operating income form instead of the single-unit rent schedule, and the report may be harder to apply. Confirm with the program first.
- Local rules. 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. A great projection means little if the use is not allowed.
- Condo and HOA limits. Lenders often want documents showing short-term rentals are permitted, plus insurance that covers that use.
- Ineligible property types. Manufactured homes, log homes, and barndominiums are not offered in these DSCR programs.
One more trap deserves its own line. DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property produces positive cash flow, because repairs, vacancy, management, utilities, and capex sit outside the calculation. A cash-out that pushes coverage down to the floor can leave you with a legal approval and a thin real margin. The strongest files have both enough equity and enough coverage.
What to Expect Step by Step
The sequence is predictable even though each file is underwritten individually.
1. Choose the program by income basis. Your broker should ask which basis each lender uses on refinances.
2. Gather your history. Keep 12 months of platform exports and matching bank deposits ready.
3. Order or supply the report. Some lenders order it themselves, and some accept one you provide.
4. Appraisal. The appraiser sets value and may add an income analysis.
5. Underwriter review. The lender applies its haircut, runs coverage, and checks LTV, credit, and reserves.
6. Property documents. HOA or condo rules, insurance, and permits are reviewed.
Corporate Finance Institute’s cash-out refinance overview explains the basic idea: you replace your loan with a larger one and take the difference. Our network adds the short-term-rental layers described above.
Key Terms Defined
Market data report: A third-party projection of an address’s short-term rental revenue, occupancy, and nightly rate, based on comparable listings.
ADR (average daily rate): The average price earned per booked night.
DSCR: Rent or qualifying income divided by the full monthly payment, including taxes, insurance, and HOA dues.
PITIA: Principal, interest, taxes, insurance, and association dues, the monthly obligation in the coverage test.
Haircut: A reduction a lender applies to gross projected income to allow for costs and vacancy.
Comp-set strength: A rating of how reliable the report’s comparable listings are.
Cash-out refinance: A new, larger loan that pays off the old one and returns the difference to you as cash.
Seasoning: The waiting period a lender wants before a refinance, commonly about 6 months for cash-out.
Frequently Asked Questions
Does a market data report replace the appraisal on a VRBO cash-out refinance?
No. The report supports the income side, and the appraisal sets the value that LTV is measured against. Even a very strong projection does not raise the appraised value.
Will every DSCR lender accept a market data report?
No. Acceptance is program-specific. Many lenders prefer documented platform history on a refinance, and select lenders in the network will accept a projection on certain files. Ask which basis each program uses before you order anything.
What if my actual bookings are higher than the report?
Programs that require history will usually use your documented numbers, subject to lender guidelines. Higher real results can help your coverage ratio. Keep exports and matching deposits ready so the underwriter can verify them.
What if my property has less than 12 months of hosting history?
Options narrow. Many programs expect about 12 months of hosting history on short-term-rental files, so a newer property may need a program that accepts a projection, or it may qualify on long-term rent only.
Does clearing 1.00 mean the property makes money?
No. The coverage test compares income to PITIA only. Repairs, vacancy, management, utilities, and capex are outside the calculation, so model them separately.
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. Lendmire is a broker that arranges these loans through select lenders in its wholesale network, across 41 markets, including Washington, D.C. Program terms vary by file, and nothing here is a commitment to lend.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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References
1. Fannie Mae: Appraiser Update June
3. Corporate Finance Institute: Cash Out Refinance
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Cash-Out Refinance Requirements When You Are Relocating · Cash-Out Refinance Requirements for Consolidating Debt · Cash-Out Refinance Requirements for a Divorce Buyout
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.