Philadelphia draws visitors all year, from hospital families and university parents to convention crowds and Eagles weekends. But the city does not make it easy for an investor to run a whole rowhouse as a nightly rental, and the rules, not the demand, are usually what decides whether a Philadelphia STR loan works.
In short: LendingStreet finances short-term rentals with DSCR loans that, on some programs, qualify on projected short-term rental revenue instead of a long-term lease. Loans start at $150,000, the standard minimum DSCR is 1.0x, the minimum credit score is 620 and LLC borrowers are standard. Inside Philadelphia, a non-owner-occupied STR generally needs a city license and zoning approval for visitor accommodation use, which is hard to get in most residential districts, so many investors buy in the Poconos, Lancaster County or Bucks County instead, or run 30-day furnished rentals in the city.
Philadelphia separates hosts who rent space in the home they live in from operators renting a whole unit they do not live in. A resident host typically operates under a limited lodging license. An investor renting an entire property for stays under 30 days is generally treated as operating a visitor accommodation, which requires both a license from the Department of Licenses and Inspections and a zoning permit allowing that use.
In most residential zoning districts, including the rowhouse districts that cover much of the city, visitor accommodation is not permitted by right. That usually means applying to the Zoning Board of Adjustment for a variance, which takes time and is not assured. Some mixed-use commercial districts may allow the use more readily. The city also requires listings to show a valid license number.
Philadelphia charges a hotel room rental tax, and Pennsylvania adds a state hotel occupancy tax. Platforms collect some of these on behalf of hosts. You are responsible for knowing what has been collected and filing what has not, along with the city's business income and receipts tax and a Commercial Activity License for the business.
For underwriting, taxes collected from guests are not income. Your DSCR is based on the revenue you keep.
Because of the zoning hurdle, many Philadelphia investors serve the same demand with furnished stays of 30 days or longer. Traveling nurses and residents at Penn Medicine, CHOP, Jefferson and Temple, visiting faculty at Penn and Drexel, and people relocating for work all book medium stays. These are generally treated as ordinary rentals that need a city rental license, a lead-safe certification for older buildings where required, and compliance with Philadelphia landlord-tenant rules.
On a DSCR loan, a medium-term rental is usually underwritten on documented income or on a market rent estimate, depending on the program. Ask before you buy which approach applies to your plan.
The Poconos, about two hours north in Monroe, Pike, Carbon and Wayne counties, are the region's largest short-term rental market, with lake communities and ski areas like Camelback, Blue Mountain and Jack Frost nearby. Many townships there require an STR permit, occupancy limits and an inspection, and many private lake communities have their own rental rules.
Lancaster County draws visitors to farm country and Amish attractions, and Bucks County towns like New Hope and Doylestown draw weekend guests from New York and Philadelphia. Across the river, the New Jersey shore is a large seasonal market, though New Jersey rules and taxes apply there. Each township and borough sets its own rules, so check the specific municipality.
| Area | Main draw | What to check |
|---|---|---|
| Philadelphia | Hospitals, universities, events | Visitor accommodation zoning, L&I license |
| Poconos (Monroe, Pike, Carbon, Wayne) | Lakes, skiing, water parks | Township STR permit, community rules |
| Lancaster County | Farm country, tourism | Township zoning, occupancy limits |
| Bucks County (New Hope area) | Weekend getaways, river towns | Borough or township rules, parking |
This example is illustrative and not a quote. A Philadelphia investor buys a four-bedroom house in a Monroe County lake community for $385,000. A third-party projection shows average revenue of $3,900 a month, with summer and ski weekends carrying most of it. At 75% LTV the loan is $288,750.
Estimated principal and interest on a 30-year loan is about $2,009. Taxes are budgeted at $480 a month, a short-term rental insurance policy at $230 and community dues at $90. The total payment is about $2,809, so DSCR on projected revenue is about 1.39x.
Before closing, the investor confirms that the township issues STR permits for that zone and that the community allows rentals under 30 days.
| Item | Amount |
|---|---|
| Purchase price | $385,000 |
| Loan amount (75% LTV) | $288,750 |
| Estimated principal and interest | $2,009 |
| Taxes, insurance and community dues | $800 |
| Total monthly payment | $2,809 |
| Projected monthly revenue | $3,900 |
| DSCR | About 1.39x |
City demand is steadier: graduations in May, conventions, hospital stays year round and sports in the fall. Pocono revenue peaks in summer and on ski weekends and drops in shoulder seasons like early spring and November. Lancaster and Bucks County lean on spring through fall weekends.
A revenue projection should show this monthly pattern. Lenders and appraisers compare it with nearby listings, and a projection with flat summer-level rates all year will not hold up.
Pennsylvania charges a realty transfer tax, and many municipalities and school districts add their own. Inside Philadelphia, the combined city and state rate is among the highest in the country, while Pocono and Lancaster townships are usually lower. The split between buyer and seller is set by contract, so check who pays before you calculate cash to close.
Furnishing and setup are usually paid from your own funds, separate from the down payment and reserves.
Send the address, price, a revenue projection or booking history and what you know about local approval. The financing team will run the ratio and tell you whether a short-term or long-term DSCR approach fits better.
Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below to get a quote.
Generally only with a visitor accommodation license and zoning approval for that use. In most residential districts that means a variance, so confirm before buying.
On some programs, yes, using a third-party projection or booking history. The property still needs to be legally allowed to operate as an STR.
Stays of 30 days or more are generally treated as ordinary rentals that need a rental license. Confirm current rules with the city.
The Poconos, Lancaster County and Bucks County are common choices. Each township or borough has its own STR rules.
Philadelphia's hotel room rental tax and Pennsylvania's hotel occupancy tax, plus local taxes outside the city. Platforms collect some of them.
Some do and some restrict them. Read the community's rules and confirm the township's permit requirements.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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