Lexington's nightly rental calendar is built around horses, basketball and bourbon. Keeneland's spring and fall meets, events at the Kentucky Horse Park, University of Kentucky football and basketball, and visitors touring distilleries all fill homes. The city's rules decide which of those homes an investor can actually rent by the night.
In short: LendingStreet finances short-term rentals in Lexington and the surrounding Bluegrass counties with DSCR loans that can qualify on projected nightly-rental revenue on some programs, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and the standard minimum DSCR is 1.0x. Lexington-Fayette County licenses short-term rentals and treats non-owner-occupied (unhosted) rentals in residential zones more strictly, generally requiring zoning approval, so confirm the path for your address first.
The Lexington-Fayette Urban County Government adopted short-term rental rules that require a license and separate hosted rentals, where the owner lives on site, from unhosted rentals, where no one does. Investor-owned STRs are unhosted. In residential zones, unhosted rentals have generally needed a conditional use permit from the Board of Adjustment, which involves an application, notice to neighbors and a hearing, with no promise of approval.
Unhosted rentals in some business and mixed-use zones face fewer hurdles. Rules can change, so check the current ordinance, license steps and fees with the city before you buy, and do not assume a seller's approval carries over to you.
| Setting | What drives bookings | What to check first |
|---|---|---|
| Residential zones in Lexington | Families visiting UK, Keeneland weekends | Conditional use permit for unhosted STRs, HOA rules |
| Downtown and mixed-use zones | Rupp Arena events, business travel, dining | Zoning district, STR license, parking |
| Near Keeneland and the airport | Race meets, horse sales | Zoning, distance to venues, HOA covenants |
| Surrounding counties (Scott, Woodford, Jessamine) | Bourbon Trail, horse farms, overflow | Each county or city's own STR rules |
Because unhosted rentals in residential Lexington face a permit process, some investors look to nearby towns. Georgetown, Versailles, Midway, Nicholasville, Paris, Winchester and Frankfort each have their own zoning and rules, and some rural areas near distilleries and horse farms draw strong weekend demand. Each jurisdiction is different, and a few are as strict as Lexington, so check before you commit.
Others choose medium-term furnished rentals of 30 days or more for traveling nurses at UK HealthCare and Baptist Health, visiting professors, horse industry workers during sales and race seasons, and families relocating. Those are usually underwritten on long-term rent.
April and October are the peaks, with Keeneland's race meets, major equestrian events at the Kentucky Horse Park and fall football. Kentucky Derby week in Louisville, about an hour west, sends overflow guests east. Basketball season fills winter weekends when UK plays at home, and summer brings distillery tourism and youth sports.
On some programs we can qualify the loan on a third-party revenue projection instead of a lease. Because a few weeks can carry a large share of the year, make sure the projection reflects all twelve months. If it comes in low, see /str-loan-low-airdna-projection.html.
This example is illustrative and not a quote. An investor buys a three-bedroom home for $385,000 in a location whose zoning permits unhosted short-term rentals, with the license approved before closing. A third-party projection shows about $36,000 a year, or $3,000 a month. Taxes are budgeted at $305 a month and STR insurance at $150.
At 75% LTV the loan is $288,750. Estimated principal and interest is about $2,019, for a total payment of about $2,474 and a DSCR of about 1.21x. Cleaning, supplies, utilities and platform fees come from your cash flow, and race-week pricing should not be assumed for the whole year.
| Item | Amount |
|---|---|
| Purchase price | $385,000 |
| Loan at 75% LTV | $288,750 |
| Estimated principal and interest | $2,019 |
| Property taxes | $305 |
| STR insurance | $150 |
| Total monthly payment | $2,474 |
| Projected monthly revenue | $3,000 |
| DSCR | About 1.21x |
Kentucky and Lexington levy transient room taxes on short stays, and Kentucky sales tax generally applies to lodging. Booking platforms may collect some of these; confirm what they remit and register for the rest.
Kentucky assesses property at fair cash value, set by the county property valuation administrator (PVA). Kentucky's homestead exemption is limited to owners who are 65 or older or disabled, so most buyers inherit a bill close to the seller's, adjusted for any reassessment after the sale. Check the Fayette County PVA record and the current tax rate for the address.
Kentucky's deed transfer tax is modest, at $0.50 per $500 of value, and is customarily paid by the seller.
Central Kentucky sits on limestone karst, and sinkholes are a known risk in parts of the region; standard policies may not cover them, so ask. Spring storms bring wind and hail. Many homes near downtown and UK are older, with plaster walls, older wiring and basements that need moisture control. Get the insurer's view during your inspection period, and ask whether the policy covers guest liability and loss of booking income after a covered claim.
If you already hold a license and booking history, that record helps support a refinance. Cash-out goes up to 75% LTV on DSCR programs, and seasoning varies by program. See /str-dscr-refinance.html, and confirm that your license and any conditional use approval remain valid.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, zoning, license status, price and any projection or booking history through the form below, or call (877) 298-1001. We will run the ratio and show options next to our Kentucky STR programs.
Possibly, but unhosted rentals in residential zones have generally required a conditional use permit through a public hearing, in addition to a license. Rules in business and mixed-use zones differ. Confirm current requirements with the city before buying.
A hosted rental has the owner living on site. An unhosted rental, which is what an investor property is, has no owner on site and faces stricter rules in Lexington's residential zones.
Some do. Georgetown, Versailles, Nicholasville, Winchester and other Bluegrass towns each set their own rules, and some are as strict as Lexington. Check each one.
On some programs, yes. We can use a third-party revenue projection instead of a long-term lease, as long as the property can legally operate as an STR.
April and October, with Keeneland's meets, Horse Park events and football, plus Derby week overflow from Louisville. Basketball weekends help in winter.
State and local transient room taxes apply, and Kentucky sales tax generally applies to lodging. Platforms may collect part of it.
The minimum credit score is 620, and LLC borrowers are standard. Stronger credit and lower leverage open more options.
Our investor loans are business-purpose loans on non-owner-occupied property, so the home must be operated as a rental business.
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