Thinking about buying a Park City place to rent on a nightly basis and wondering how to finance it with predictable returns? You are not alone. In a high-demand, seasonal market like Park City, the right loan structure can make or break your numbers. In this guide, you will learn how DSCR loans and portfolio financing work for short-term rentals, which local rules shape underwriting, and the exact steps to build a lender-ready file. Let’s dive in.
What DSCR loans mean for Park City STRs
How lenders calculate DSCR
Debt Service Coverage Ratio (DSCR) tells a lender if rental income can cover the mortgage. It is simply NOI divided by annual principal and interest. If DSCR is above 1.0, income covers payments; above 1.15–1.25 often earns better pricing. For a quick refresher on DSCR, see the core definition and formula.
How DSCR lenders count STR income
Many lenders will use one or more of these methods for short-term rental income:
- Actual history from the property, such as 12 months of P&L and payouts.
- Third-party projections from platforms like AirDNA or similar, sometimes with a haircut.
- An appraisal-driven rent schedule when STR comps are not accepted.
Lenders often ask for platform statements, bank statements, and proof of licensing. Programs that focus on STRs spell out the documentation they accept, including projections and compliance addenda, as shown by recent lender guidance.
Typical DSCR terms and costs
Most DSCR programs cap loan-to-value around 75 to 80 percent for purchases and refinances. Minimum DSCR requirements vary, but many lenders look for 1.15 to 1.25 for stronger approval odds and pricing, consistent with common program criteria. Expect credit score screens and reserves, especially if you operate multiple properties. Rates move with the market and are usually higher than owner-occupied mortgages, so get live quotes when you are close to making an offer.
Portfolio and blanket loans
When they make sense
A portfolio or blanket loan is one mortgage secured by multiple rental properties. It can simplify payments, reduce duplicated closing costs, and unlock larger cash-out across a group of assets. See how portfolio rental loans are commonly structured in program overviews.
Underwriting and requirements
Lenders may require a minimum number of properties or a minimum total loan size. LTVs often cap near 75 percent, and reserves are usually higher than single-property loans. Some programs are recourse, others are not, depending on size and risk.
Risks in a seasonal resort market
A blanket loan ties performance together. If one home underperforms, it can affect the entire note. Lenders and borrowers should stress test worst-case seasonal cash flow and build larger reserves, a best practice highlighted in portfolio DSCR guides.
Park City rules that shape financing
Licensing and zoning
Park City requires a Nightly Rental License for stays under 30 days, with application, inspection, and renewal steps. Lenders may ask for proof of licensing and compliance as part of underwriting. Review the city’s Nightly Rental License requirements before you model income.
Taxes and fees to model
Short-term rentals are subject to transient room tax and sales taxes that impact your net operating income. Confirm current rates and recent changes using the county’s finance and tax resources and factor them into your projections.
Market signals to factor into your numbers
Seasonality and demand
Park City is one of Utah’s most active STR hubs, with strong tourism and a high share of homes in short-term use, according to statewide research. Public dashboards show a high-ADR, seasonal market with moderate occupancy. To see market-level trends, check Park City STR metrics and build address-level comps for your property type.
Event and tax-receipt swings
Visitor counts and major events can drive big month-to-month differences. Recent reporting shows record monthly sales-tax receipts in Park City for peak periods, which underscores seasonality and timing. Get familiar with the city’s revenue swings in local coverage of record sales-tax months.
Step-by-step: Build a lender-ready file
- Verify STR eligibility at the address. Pull zoning notes and the Park City Nightly Rental License status or application in progress. Include inspection reports and HOA rules where applicable.
- Pull address-level income comps. Use a reputable STR data source and pair it with any existing booking history, payout statements, and a simple P&L.
- Model seasonality. Show monthly projections and a worst-case plan for slow periods. Aim to document reserves that cover 6 to 12 months of payments for portfolios.
- Include taxes and fees in NOI. Add transient room tax, sales tax, and any special assessments so lenders see a realistic net number.
- Organize your package. Keep a single folder with licenses, STR data reports, P&L, bank statements, and insurance quotes to speed up underwriting.
Example financing paths to scale
- Start with single-property DSCR loans. Season the asset with 12 months of bookings, then refinance to improve pricing and extract equity.
- Group several properties into a portfolio loan. Use the consolidated loan to simplify payments and access larger cash-out for the next purchase.
- Diversify lender exposure. If one lender caps the number of loans, work with a second lender and use entity structures to manage risk.
Final thoughts
In Park City, strong daily rates can support compelling returns, but lenders will look closely at licensing, taxes, and seasonal swings. If you prepare the right data and choose the right loan type for your stage, you can finance with confidence and scale smart. If you want a local, bilingual guide to help you evaluate an address, line up lender-ready numbers, and navigate Park City’s rules, reach out to Florencia Barrera.
FAQs
Can I get a DSCR loan for a Park City STR without 12 months of rental history?
- Yes. Many lenders accept third-party projections and partial booking history in place of a full-year P&L, though they may apply conservative haircuts and ask for extra reserves.
How do Park City licensing and taxes affect my loan approval?
- Lenders often require proof of a Nightly Rental License and will account for transient room and sales taxes in NOI, which can impact your DSCR and max loan amount.
Will lenders finance STR condos in Park City?
- Often yes, but they will review HOA rules on nightly rentals and project financials. Non-warrantable buildings may need specialty programs.
Are portfolio loans cheaper than separate DSCR loans?
- Sometimes. Portfolio loans can lower per-property admin costs and unlock larger cash-out, but they may require stronger reserves and introduce cross-default risk.
How many DSCR loans can I have at once?
- There is no universal cap. Each lender sets its own exposure limits, so many investors spread loans across multiple lenders or entities to scale.
