Short-Term Rental DSCR Loans in Maryland

Start with the local rules, not the booking projections

In Maryland, short-term rental (STR) rules are set locally, and they vary more than almost any other investor rule in the state. A lender will count STR income only from a lawful use, so the first question for any STR plan is whether the property can be licensed as an investor-owned short-term rental.

• Montgomery County. The county's short-term rental license generally requires proof that the property is the host's primary residence. A DSCR-financed, non-owner-occupied property cannot meet that requirement, so investor-only STRs there generally are not an option.
• Baltimore City. The city licenses short-term rentals and sets its own limits and requirements; confirm whether an investor-owned property can qualify.
• Anne Arundel County and Annapolis. Both regulate short-term rentals with licensing and operating rules.
• Ocean City and Worcester County. Established resort markets with rental licensing and room-tax collection.
• Garrett County (Deep Creek Lake). The county licenses transient rentals with safety and occupancy standards.
• Other counties and towns. Frederick, Talbot, Queen Anne's, St. Mary's and others have their own approaches. Always check the specific jurisdiction.

How lenders count STR income

DSCR programs that accept short-term rental income use one of a few methods, and each lender chooses its own. Some use a booking history, typically twelve months of statements from the platform or management company. Some accept an STR income analysis prepared with the appraisal, using comparable short-term rentals. Others will only use the long-term market rent, even for a property operated as an STR. A few programs exclude short-term rentals entirely.

Lenders also typically apply an expense factor or use net figures, since STRs carry cleaning, management, platform fees, supplies and utilities that a long-term landlord does not pay. Ask how the program you are considering treats income before you rely on a projection.

Seasonality in Ocean City and Deep Creek

Maryland's two main resort markets are strongly seasonal. Ocean City demand concentrates in summer, with shoulder seasons in spring and fall and a quiet winter. Deep Creek Lake has summer lake demand and a second winter peak tied to skiing. A strong July does not mean a strong year. When you model income, use a full-year view and be conservative about the slow months.

Insurance matters too. Beachfront condos and bayside homes may need flood coverage and carry wind deductibles, and furnished rentals need appropriate liability coverage. Those costs go into the payment the income must cover. See the Eastern Shore page and the Western Maryland page.

Run both the STR and the long-term case

The most resilient STR purchases also work as long-term rentals. If a county tightens its rules, if a condo association restricts short stays, or if bookings fall, a property that clears the ratio on long-term market rent still has a path. Run the DSCR calculator twice: once with a conservative monthly average of STR income, once with the long-term market rent. Then read STR vs. LTR DSCR for the full comparison.

Example with user-style inputs: a Deep Creek cabin with an annual STR income estimate of $42,000 averages $3,500 a month. If the full payment from your quote, taxes, insurance and dues is $2,900, the STR-based ratio is about 1.21. If the long-term market rent is $1,900, the long-term ratio is about 0.66, which tells you the investment depends heavily on short-term income staying available.

No personal use

A property financed with a business-purpose DSCR loan must not be used by you or your family. That rules out the common plan of renting a beach condo most of the summer and using it yourself for a week or two. If you want a vacation home for personal use, that is a second home, and this site does not arrange it.