Massachusetts registers short-term rentals statewide and taxes them like hotel rooms. Boston bars investor units, but Cape Cod, Martha's Vineyard, Nantucket and the Berkshires remain major vacation rental markets.
In short: Yes. LendingStreet finances short-term rental DSCR loans on 1-8 unit investment properties in Massachusetts, and on some programs the loan qualifies on projected nightly-rental revenue instead of a long-term lease. There are no W-2s or tax returns, LLC borrowers are standard, the minimum credit score is 620 and loans start at $150,000. Investor demand concentrates on Cape Cod, the Islands and the Berkshires, because Boston limits short-term rentals to owner-occupied homes.
Cape Cod is the largest market, from Falmouth and Barnstable to Dennis, Harwich, Chatham, Orleans and Wellfleet. Martha's Vineyard and Nantucket are premium island markets with very high prices. Plymouth and the South Shore add summer demand closer to Boston.
In western Massachusetts, the Berkshires, including Lenox, Great Barrington and Stockbridge, draw visitors for Tanglewood, theater and fall foliage. Salem fills in October, and university towns see graduation and parent weekends. Cape and Island buyers compete with second-home purchasers, so prices run high relative to rental revenue and ratios are often tight.
| Market | Who books | What to check |
|---|---|---|
| Cape Cod | Summer families | State registration, town rules |
| Martha's Vineyard and Nantucket | Premium summer visitors | Town rules, very high prices |
| Berkshires | Arts and foliage visitors | Town zoning, septic |
| Boston | Tourists, business | Owner-occupied only |
Massachusetts requires short-term rental operators to register with the state, and every town can add its own rules. Boston allows short-term rentals only in owner-occupied units, so investor-owned units cannot operate there. Cambridge and Somerville have similar limits.
Cape and Island towns regulate through local bylaws, and some have debated caps. Nantucket has seen repeated town meeting votes on rentals. Check the town and any association rules for the address.
A DSCR loan compares the property's income with its monthly payment: principal, interest, property taxes, insurance and any HOA dues. On a short-term rental, some programs use a third-party revenue projection for the address, often with comparable listings nearby, instead of a signed long-term lease. Others use the property's own booking history when it has one.
The standard minimum ratio is 1.0x, with sub-1.0 programs for some files. Purchases go up to 80% LTV and cash-out refinances up to 75% LTV, though maximum leverage on short-term rentals and larger balances varies by program. Terms up to 30 years are available, and LLC borrowers are standard. Properties from one to eight units qualify, so a duplex or a small group of cabins on one parcel can work; nine or more units is a commercial loan.
Massachusetts applies its room occupancy excise to short-term rentals, and towns can add a local option excise. Cape and Islands towns also charge a water and sewer infrastructure tax, and some towns add a community impact fee on certain units. Platforms collect many of these.
Some Massachusetts towns, including Boston, Nantucket and several Cape towns, offer a residential exemption only to owner-occupants, so investors can pay noticeably more than a seller who lived in the home. Use the non-exempt bill.
Coastal homes on the Cape and Islands may need flood insurance, and wind deductibles apply in many areas. Older cottages may need updates before carriers will write a policy for rental use.
Many Cape homes have Title 5 septic systems, which must pass inspection at sale in most cases. A failed septic system can delay closing or add a large repair cost, so schedule the inspection early.
This example is illustrative and not a quote. An investor buys a three-bedroom home in Dennis on Cape Cod for $790,000. A projection for comparable homes shows $67,000 a year in gross revenue. At 75% LTV the loan is $592,500, and estimated principal and interest on a 30-year term is about $4,143 a month. Add $450 in taxes, $280 in insurance, and the payment is about $4,873. $5,583 of average monthly revenue divided by that payment gives a DSCR of about 1.15x.
At 70% LTV instead, the loan drops to $553,000, the payment falls to about $4,597 and the DSCR rises to about 1.21x, in exchange for $39,500 more cash at closing. Most of this revenue comes from June through September. Weekly summer rentals booked a year ahead give some stability, but the projection must still average slow winter months.
| Item | Amount |
|---|---|
| Purchase price | $790,000 |
| Loan amount at 75% LTV | $592,500 |
| Down payment | $197,500 |
| Projected annual revenue | $67,000 |
| Average monthly revenue | $5,583 |
| Estimated principal and interest (30-year) | $4,143 |
| Property taxes | $450 |
| Insurance | $280 |
| HOA dues | None |
| Total monthly payment | $4,873 |
| DSCR | About 1.15x |
Cape Cod and the Islands earn most of their revenue from late June through Labor Day, with shoulder months in June and September. The Berkshires peak in summer and October. Salem's October is unusual, with demand clustered in a single month. Winter is slow on the Cape and Islands.
Having these on hand keeps underwriting and the appraisal moving:
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us the address, purchase price, expected revenue and target loan amount. We test the ratio against the real tax and insurance figures, raise rule or HOA questions early and lay out options, including qualifying on long-term rent where that works better.
We lend in Barnstable, Dukes, Nantucket, Berkshire, Plymouth and the rest of Massachusetts's counties. Use the form below or call (877) 298-1001.
No. Boston limits short-term rentals to owner-occupied units.
Yes. Operators must register with the state, and towns can add their own rules.
The state room occupancy excise, a local option excise in many towns and, on the Cape and Islands, a water and sewer infrastructure tax.
Some towns give a residential exemption only to owner-occupants. Investors do not qualify.
On some programs, yes. A third-party revenue projection for the address can replace a long-term lease. If the projection comes in low, a larger down payment, a sub-1.0 program or long-term rent can still make the deal work.
No. The loan qualifies on the property's income. You need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so a second home you use yourself is not a fit.
Plan for the down payment, closing costs and reserves. Short-term rental programs and larger loans can require more down than the 80% LTV maximum implies, so it varies by program.
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