How to Get Cash Out of Your Airbnb Property: A Guide to Cash-Out Refinancing
Owning an Airbnb property can be a great investment, generating strong cash flow through short-term rentals. But what if you need access to capital to fund another investment, renovate your property, or consolidate debt?
A cash-out refinance on your Airbnb property allows you to tap into your home equity, turning it into cash while keeping your rental property.
This guide will walk you through how cash-out refinancing works, its benefits, eligibility requirements, and alternative ways to pull equity from your short-term rental (STR).
What Is a Cash-Out Refinance?
A cash-out refinance replaces your existing mortgage with a new loan for a higher amount than what you currently owe. The difference between the new loan amount and your old mortgage balance is paid to you in cash.
For example:
- Your Airbnb property is worth $500,000
- You owe $250,000 on your current mortgage
- With a 75% loan-to-value (LTV) limit, you can borrow up to $375,000
- After paying off your old loan, you walk away with $125,000 in cash
You can then use the cash for renovations, investments, or other financial needs while keeping your property and continuing to earn rental income.
Benefits of a Cash-Out Refi for Airbnb Owners
✅ 1. Access to Capital Without Selling
A cash-out refi lets you unlock your home equity without selling your property—allowing you to keep earning passive income.
✅ 2. Lower Interest Rates Compared to Other Loans
Mortgage loans typically have lower interest rates than credit cards or personal loans, making cash-out refinancing a more affordable way to access funds.
✅ 3. Tax Benefits
Mortgage interest on a cash-out refinance may be tax-deductible if you use the funds to improve your Airbnb property (consult a tax professional for details).
✅ 4. Expand Your Real Estate Portfolio
Many Airbnb hosts use their equity to fund new property purchases, allowing them to grow their STR business.
✅ 5. Improve Your Airbnb Property for Higher Rental Income
Upgrading your Airbnb can lead to higher occupancy rates and rental prices, maximizing your return on investment.
Eligibility Requirements for a Cash-Out Refi on an Airbnb
Getting a cash-out refinance on a short-term rental is different from refinancing a primary residence. Here’s what lenders typically look for:
🏡 1. Property Type
Most lenders require the property to be:
- A single-family home, condo, or multi-unit property
- Not a primary residence (Investment properties may have stricter loan terms)
- Airbnb-friendly (Some lenders prefer long-term rentals)
💰 2. Loan-to-Value (LTV) Ratio
- Lenders usually allow 70-75% LTV on an investment property.
- That means if your Airbnb is worth $400,000, you may qualify for a loan up to $280,000 – $300,000.
📈 3. Credit Score
- Minimum 680-700 for most conventional lenders.
- Some private lenders may accept lower scores but may charge higher interest rates.
📝 4. Income Verification & Rental History
Lenders may require proof of income, including:
- Airbnb rental history & income statements
- Tax returns showing rental income
- Bank statements or profit/loss statements
Some lenders offer “no income doc” loans, using the property’s value instead of your personal income to qualify.
📊 5. Debt-to-Income (DTI) Ratio
- Most lenders prefer a DTI ratio of 43% or lower.
- Some non-traditional lenders may approve higher DTI borrowers.
How to Get a Cash-Out Refi on Your Airbnb Property
Step 1: Determine Your Home’s Value
Before applying, check your property’s current market value through:
- A real estate agent’s comparative market analysis (CMA)
- Online valuation tools (Zillow, Redfin, etc.)
- A professional appraisal (often required by lenders)
Step 2: Shop for Lenders
Not all lenders offer cash-out refinancing for Airbnb properties. Consider:
- Traditional banks & credit unions (Stricter, but lower rates)
- Mortgage brokers (More flexible options)
- Private lenders & DSCR loans (No income verification required)
Step 3: Gather Your Financial Documents
Lenders will likely ask for:
✔ Property title & mortgage statement
✔ Airbnb rental income history (if applicable)
✔ Tax returns & bank statements
✔ Proof of homeowners insurance
Step 4: Apply and Get Approved
- Submit your loan application & required documents.
- Your lender will review your credit, home value, and income.
- An appraisal may be required to confirm the property’s value.
Step 5: Close on Your New Loan & Get Cash
- Once approved, you’ll sign the new loan agreement.
- Your old mortgage will be paid off, and the remaining cash is sent to you.
Alternative Ways to Tap Into Your Airbnb Equity
If a cash-out refinance isn’t the right fit, here are other ways to pull equity from your short-term rental:
🏡 1. Home Equity Line of Credit (HELOC)
A HELOC is a revolving credit line based on your home equity. You can borrow as needed and only pay interest on what you use.
🔹 Pros: Flexible, lower interest than credit cards
🔹 Cons: Variable interest rates, can be frozen by banks
🏡 2. Home Equity Loan
A home equity loan is a lump-sum loan secured by your property. Unlike a HELOC, it has a fixed interest rate.
🔹 Pros: Fixed payments, predictable interest rate
🔹 Cons: Higher monthly payments than HELOC
🏡 3. DSCR Loan (No-Income Loan for Investors)
A Debt-Service Coverage Ratio (DSCR) loan is great for Airbnb owners because it’s based on rental income, not personal income.
🔹 Pros: No W-2s or tax returns required
🔹 Cons: Higher rates than traditional loans
🏡 4. Short-Term Rental Loans (Airbnb-Specific Loans)
Some lenders offer special loans for short-term rental investors, focusing on the property’s performance rather than the borrower’s personal income.
🔹 Pros: Designed for Airbnb hosts, more flexible approval
🔹 Cons: Limited lender options
Final Thoughts: Is a Cash-Out Refi Right for Your Airbnb?
If you have significant equity in your Airbnb property, a cash-out refinance can be a powerful tool to:
✔ Access cash for renovations, investments, or other needs
✔ Secure lower interest rates than other loan options
✔ Keep ownership of your profitable Airbnb property
However, it’s important to compare lenders, understand loan terms, and ensure refinancing aligns with your financial goals.
👉 Thinking about refinancing your Airbnb? Have questions? Drop a comment below! 🚀
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