If you are hoping to buy a condo in the South End or a triple-decker in Dorchester and run it on Airbnb, stop and read Boston's ordinance first. The city does not allow investor units as short-term rentals, so most Boston-area STR financing happens outside the city line.
In short: LendingStreet finances short-term rental properties for Boston-area investors with DSCR loans that can qualify on projected nightly revenue on some programs, with no W-2s or tax returns. Boston itself limits short-term rentals to units where the owner lives, so a non-owner-occupied STR inside the city generally will not work. Investors who want nightly income usually buy on Cape Cod, the South Shore, the North Shore or in western Massachusetts, where town rules allow it.
Boston's short-term rental rules, adopted in 2018 and in force since 2019, tie eligibility to the owner's primary residence. Owners can rent a room or a unit in a building they live in, after registering with the city, but a unit owned purely as an investment cannot be registered as a short-term rental. Platforms are expected to remove listings that are not registered.
For a lender, that means projected nightly revenue on a Boston investment unit is not usable income. Our investor loans are business-purpose loans on non-owner-occupied property, and we cannot underwrite a Boston STR that depends on the owner living there. If you already own a Boston condo or multi-family, the realistic path is a long-term lease and a standard DSCR loan, or a furnished rental of 30 days or longer if the building and city rules allow it.
Cambridge, Somerville and several inner suburbs also restrict investor STRs. Check each city's rules before you count on nightly income anywhere inside Route 128.
Most Massachusetts STR demand sits in vacation markets within a two to three hour drive of Boston. Rules are set town by town, and many towns require registration, inspections or minimum stays, so confirm with the town clerk or building department before you sign a purchase contract.
| Market | Main season | Common local issues |
|---|---|---|
| Inside Boston | Not available for investor units | Owner-occupancy requirement, city registration |
| Cape Cod | Late June to Labor Day, shoulder months | Town registration, septic and Title 5, flood zones |
| North Shore | Summer, plus October in Salem | Parking, town rules, older housing |
| Berkshires | Summer, foliage, ski weekends | Rural comps, wells and septic, winter access |
Since 2019 Massachusetts has applied its room occupancy excise to most short-term rentals, and towns can add local room occupancy taxes and, in some places, a community impact fee. Operators register with the Massachusetts Department of Revenue, and booking platforms collect and remit tax on many stays. Ask your accountant how it applies to your listing.
The state also keeps a short-term rental registry. Your town may have its own registration or license on top of that. Keep copies of every registration in your loan file, because lenders want to see that the property can legally operate.
On some programs, an STR can qualify on a third-party projection of nightly revenue rather than a 12-month lease. The projection should use comparable listings in the same town, with similar bedrooms, distance to the water or slopes, and amenities. Some programs discount the projection or use trailing revenue on a refinance, so the ratio you see in a listing tool may not be the ratio used in underwriting.
Seasonality matters more here than in many states. A Cape cottage may earn most of its year between late June and Labor Day. Lenders look at annual revenue spread across 12 months, so budget reserves for the slow winter months.
This example is illustrative and not a quote. An investor buys a three-bedroom Yarmouth cottage for $720,000. A third-party projection estimates $78,000 a year in gross nightly revenue, or about $6,500 a month averaged across the year. Property taxes are budgeted at $450 a month and insurance, including wind coverage, at $375.
At 75% LTV the loan is $540,000 on a 30-year term. Estimated principal and interest is about $3,720, and the full monthly payment is about $4,545. On the full projection the DSCR is about 1.43x. If a program discounted the projection by 20%, income would be about $5,200 and DSCR about 1.14x, still above the 1.0x standard minimum.
| Item | Full projection | Projection less 20% |
|---|---|---|
| Purchase price | $720,000 | $720,000 |
| Loan at 75% LTV | $540,000 | $540,000 |
| Monthly revenue used | $6,500 | $5,200 |
| Estimated principal and interest | $3,720 | $3,720 |
| Taxes and insurance | $825 | $825 |
| Total monthly payment | $4,545 | $4,545 |
| DSCR | About 1.43x | About 1.14x |
Coastal insurance is the line that surprises Boston buyers. Many Cape and Islands properties carry a separate wind or hurricane deductible, and homes in mapped flood zones generally need flood insurance. Older cottages on septic must pass a Title 5 inspection at sale, and a failed system can mean a costly replacement before the property can be rented.
Property tax rates in many Cape towns are low compared with the Boston suburbs, but valuations are high. Use the town assessor's current figure on your purchase price, not the seller's bill.
If you bought a vacation rental with cash or a short-term loan, an STR DSCR refinance can use the property's booking history. Twelve months of platform statements usually make the strongest case. Cash-out goes up to 75% LTV, and seasoning varies by program. A cottage that had a weak first season may look better on a projection than on trailing income, which our team can compare for you.
Send the address, price, town registration status, any booking history and a revenue projection if you have one. We will tell you quickly whether the town's rules and the numbers support an STR loan, or whether a long-term lease is the better fit. Use the form below or call (877) 298-1001.
Generally no. Boston limits short-term rentals to units where the owner lives, so a non-owner-occupied unit cannot be registered. We finance those properties as long-term rentals.
Yes, where the town allows short-term rentals. Many Cape towns require registration or inspections, and some properties need flood insurance or a Title 5 septic inspection.
On some programs, yes. A third-party projection based on comparable local listings can be used, and some programs discount it.
The state room occupancy excise applies to most short-term stays, and towns can add local taxes and fees. Register with the Department of Revenue and check your town.
DSCR loans start at $150,000 with no stated maximum. Purchases go up to 80% LTV, often lower on STRs and larger balances, and the minimum credit score is 620.
Yes. LLC borrowers are standard on our DSCR programs.
Stays of 30 days or longer are generally treated differently from short-term rentals, but building rules and city requirements still apply. We would underwrite it on long-term rental income.
Lenders average annual revenue over 12 months, so a strong summer can carry slow winters. Keep reserves for the off-season.
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