Indiana's short-term rentals earn on big weekends: the Indianapolis 500, Notre Dame and IU football, conventions and Lake Michigan summers. Brown County cabins and northern lake homes fill in between.
In short: You can finance an Indiana Airbnb or VRBO property with a DSCR loan from LendingStreet, and on some programs the property qualifies on projected short-term rental income instead of a long-term lease. Loans start at $150,000 with no stated maximum, the minimum credit score is 620 and there are no W-2s or tax returns. Event-driven markets need a projection that captures the full year, and Indiana's property tax caps give rentals a higher ceiling than homesteads.
Indianapolis draws visitors for the Indianapolis 500 in May, conventions, college and professional sports and business travel. Neighborhoods near downtown, Fountain Square, Mass Ave and Broad Ripple see steady demand. South Bend fills on Notre Dame home game weekends, and Bloomington on Indiana University weekends.
Brown County and the town of Nashville are a cabin market in the hills south of Indianapolis. The Indiana Dunes area, including Chesterton, Michigan City and Beverly Shores, draws Chicago visitors to Lake Michigan beaches. Lake Wawasee, Lake Monroe and the northern lakes add summer lake demand.
| Market | Who books | What to check |
|---|---|---|
| Indianapolis | Race fans, conventions, sports | City permit, HOA rules |
| South Bend and Bloomington | Game weekends, campus visitors | City registration, zoning |
| Brown County | Cabin weekenders, fall color | Septic, steep drives |
| Indiana Dunes | Chicago beachgoers | Town rules, shoreline |
Indiana law limits how far local governments can go in banning short-term rentals, though they can require registration, permits and health and safety rules. Indianapolis requires short-term rental operators to register, and lake and beach towns have their own rules.
HOAs and lake associations can restrict rentals through their covenants. Confirm the local registration and any HOA position for the address.
The ratio is simple: monthly income divided by the monthly payment, where the payment includes principal, interest, taxes, insurance and HOA dues. What changes on a short-term rental is the income figure. Some programs accept a projection of nightly-rental revenue from a third-party data provider; others lean on 12 months of booking history.
A ratio of 1.0x or better meets the standard minimum, and some programs go below it. Leverage tops out at 80% LTV on a purchase and 75% on a cash-out refinance, but short-term rental programs and bigger balances can be lower, so it varies by program. No W-2s, a 620 minimum score, LLC borrowers welcome and terms up to 30 years. The program covers one to eight units, which includes duplexes and small cottage groups; nine units or more is handled as commercial.
Indiana applies state sales tax to short-term lodging, and counties levy an innkeeper's tax, which varies by county. Platforms collect many of these taxes, but direct bookings require registration with the state and county.
Indiana caps property taxes as a share of gross assessed value: 1% for homesteads, 2% for other residential property including rentals and 3% for commercial. A rental bought from an owner-occupant can see its bill rise toward the higher cap.
Insurance needs to cover nightly rental use. Brown County cabins on steep lots with wood stoves can draw closer review, and lake homes near flood zones may need flood coverage. Severe storms can affect roof claims statewide.
Brown County's steep, wooded lots and long gravel drives mean appraisers and insurers look closely at access in winter, and septic capacity can limit how many guests a cabin is allowed to host. Along the Dunes, older beach cottages may need updates before carriers will write a policy for rental use.
This example is illustrative and not a quote. An investor buys a three-bedroom cabin with a hot tub near Nashville, Indiana, for $375,000. A projection for comparable cabins shows $36,000 a year in gross revenue. At 75% LTV the loan is $281,250, and estimated principal and interest on a 30-year term is about $1,967 a month. Add $360 in taxes, $160 in insurance, and the payment is about $2,487. $3,000 of average monthly revenue divided by that payment gives a DSCR of about 1.21x.
If the projection came in lower, the investor could borrow less. At 70% LTV the loan is $262,500, the payment about $2,355 and the DSCR about 1.27x, with $18,750 more brought to closing. The 2% tax cap on rentals keeps the tax line predictable. A cabin bought from an owner-occupant may see its bill move up from the 1% homestead cap.
| Item | Amount |
|---|---|
| Purchase price | $375,000 |
| Loan amount at 75% LTV | $281,250 |
| Down payment | $93,750 |
| Projected annual revenue | $36,000 |
| Average monthly revenue | $3,000 |
| Estimated principal and interest (30-year) | $1,967 |
| Property taxes | $360 |
| Insurance | $160 |
| HOA dues | None |
| Total monthly payment | $2,487 |
| DSCR | About 1.21x |
Indianapolis peaks in May around the 500 and during big conventions and sporting events. College towns depend on football season, graduation and move-in weekends. Brown County peaks in October for fall color. The Dunes and northern lakes are summer markets. Averaging all 12 months is what the ratio uses.
A complete file moves faster. Gather these before you apply:
Our investor loans are business-purpose loans on non-owner-occupied property. Share the address, the price, a revenue projection and how much leverage you want. We run the ratio on realistic taxes and insurance and come back with a few structures, plus a refinance path once the property has a booking history of its own.
We lend in Marion, Brown, Porter, Monroe, St. Joseph and the rest of Indiana's counties. Reach us at (877) 298-1001, or get a quote through the form below.
Indiana law limits local bans, but cities can require registration, permits and safety rules. Check the rules for the address.
It is a county tax on lodging, including short-term rentals, charged on top of state sales tax.
Rentals fall under the 2% cap on gross assessed value, versus 1% for homesteads, so the bill can rise after an investor buys.
The ratio uses average monthly revenue across the year, so a strong May has to carry slower months.
Not on every program. Some qualify a short-term rental on projected nightly revenue or on its booking history instead of a 12-month lease.
Yes. Once you have booking history, a rate-and-term or cash-out refinance can use actual revenue. Our STR refinance guide, linked below, covers how that works.
No. Our investor loans are business-purpose loans on non-owner-occupied property only, so primary and second homes are out.
Timing depends mostly on the appraisal, title and insurance. A complete file with the revenue projection, permit confirmation and insurance quote in hand moves fastest.
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