Airbnb Your House with a Mortgage

Many homeowners believe they are completely locked into their mortgage and cannot rent out their house on Airbnb. There’s a fear that your mortgage lender will pull your loan out from under you, leaving you stranded without financing. False! You can legally Airbnb your house with a mortgage tied to it. Rent your home on Airbnb or VRBO with confidence. However, you must tell your mortgage company and get permission first.

Follow this guide to learn how to Airbnb your house with a mortgage tied to it and start generating rental income.


Tell Your Mortgage Company About the Airbnb

Most mortgage companies will require you to tell them about your plans to Airbnb your house if it was your primary residence.

But Mom, do I really need to tell my mortgage lender that I want to Airbnb my property? It’s my property after all!

Yes, you must tell your mortgage lender (bank) about your Airbnb rental plans. The mortgage that they loaned to you is a specific type of financing product. As the homeowner, you received certain terms based on the occupancy status of the home, including:

  • Loan length
  • Interest rate

Once the occupancy changes, you legally must tell your mortgage lender about it. If your original plans were to rent out your house on Airbnb, you would have received a different mortgage with different terms. Typically, rental properties receive less favorable mortgage terms versus a primary residence.


Getting a Mortgage for an Airbnb House is Hard

Rent house on Airbnb with a Mortgage

Rental properties, including homes listed on Airbnb, are riskier for mortgage companies to lend on. Long-term rentals are safer than Airbnb’s. There are strict short-term rental laws to follow as an Airbnb host that can limit your rental income.

The bank wants to be confident that you can pay your monthly mortgage payments! Without that confidence, they will offer you less favorable loan terms. They wouldn’t have given you such a great mortgage for your primary residence if they knew you had plans to rent it out on Airbnb. Homeowners usually change their loan terms to rent their home on Airbnb with a mortgage tied to it.


Long-term vs Short-term Rentals with a Mortgage

Mortgage lenders prefer long-term rentals over short-term rentals. Depending on the bank, there will be different loan products that they offer for each scenario.

You can get a mortgage for a house you plan to rent on Airbnb. If the loan terms aren’t favorable, try starting with long-term tenants. Landlords can show the positive cash flow and rental income that the property generates. The mortgage company will consider the revenue generated when switching from long-term tenants to short-term on Airbnb.


Mortgage Lenders Allow Airbnb

Most mortgage lenders allow you to Airbnb your house. There’s a chance you will be required to restructure your mortgage to legally do so.

The new mortgage will be income based, meaning the lender will take the rental income into consideration. Ideally, you can show strong rental income. Income-based mortgages can help or hurt you depending on how much money your Airbnb generates. Rent a house on Airbnb with a mortgage by showing the rental income it brings in.

Showing the income of a long-term rental is easier than an Airbnb. Landlords can simply show the signed leases in place with their long-term tenants. Mortgage companies prefer to see leases in writing with high rent amounts when lending to homeowners.


Airbnb Your Primary Residence with a Mortgage

How to Airbnb My House San Diego

Instead of going through the hassle of telling your mortgage company about your Airbnb rental plans, consider keeping it as your primary residence. If the loan you received was an owner-occupied loan, you are required to live in the property.

Now, each mortgage is different. Consult with your mortgage company and read through the guidelines of your loan to determine the best approach.

For many mortgages, you can continue to occupy the property as your primary residence while renting out a portion of the home on Airbnb. Depending on the city, Airbnb hosts need a permit to legally operate the property as a short-term rental. Typically, cities are more forgiving when a homeowner only rents a portion of the property out on Airbnb.

This is a win-win when trying to rent your house on Airbnb with a mortgage. You can rent out empty rooms (or units) on your property while keeping the same mortgage in place. Avoid redoing your entire mortgage paperwork and rent out a portion of your primary residence as a short-term rental.


Can I Rent My House on Airbnb With a Mortgage

If you’ve wondered if I can rent my house on Airbnb with a mortgage tied to it, you’re in luck. Even in expensive real estate markets, like California, homeowners can rent out their properties to short-term guests.

Vacation rentals help property owners make additional rental income. Even if you rent out a portion of your primary residence on Airbnb, you can use that rental income to pay off some of your mortgage principal. Disclose to your mortgage company if you plan to rent out the entire property. Honesty is the best policy in real estate. Once you’ve readjusted your loan terms, you can rent out your house on Airbnb with a mortgage and stay making money.

SD House Guys are a group of professional homebuyers that work with Airbnb rentals regularly. Learn more about companies that buy houses by viewing our comprehensive seller’s guides.

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