Can You Get a DSCR Loan on a Property With an Existing Tenant?

Why an existing tenant usually helps

DSCR lenders like documented, in-place income because it removes a layer of uncertainty. A signed lease with a rent payment history is generally more straightforward to underwrite than a market rent estimate or an STR projection tool, since there's less judgment involved in what the number should be.

If you're buying the property as a straightforward long-term rental and keeping the existing tenant in place, the lender typically uses the actual lease amount (sometimes cross-referenced against market rent) as the income figure for the DSCR calculation.

Where it gets more complicated: converting to STR

The complication shows up when your actual plan is to convert the property to a short-term rental after closing — meaning the existing tenant's lease income isn't what you intend to rely on long-term. In that case, be upfront with the lender about your plan rather than letting the file reflect a use you don't intend to continue.

• If you plan to keep the tenant: straightforward, lease income is the DSCR basis.
• If you plan to convert to STR after the lease ends or after buyout: discuss whether the lender will underwrite on the current lease, the STR projection, or something conservative between the two.
• Tenant buyout or non-renewal timing: factor this into your closing and conversion timeline — you generally can't force out an existing tenant just because you bought the property.
• Local law matters here too: some markets restrict how quickly a property can convert from long-term to short-term use — see /short-term-rental-laws/.