Leverage amplifies both the return and the risk
Financing a short-term rental with debt reduces the cash required upfront and can meaningfully increase cash-on-cash return when the property performs as underwritten -- but it also means debt service is a fixed obligation regardless of a slow season.
The right amount of leverage depends on the investor's cash reserves and risk tolerance, not just on what a lender is willing to offer.
All-cash reduces risk but changes the return profile
An all-cash purchase eliminates debt service risk and can simplify qualification, at the cost of tying up significantly more capital in a single property and generally lowering cash-on-cash return compared to a well-structured leveraged deal.
Neither approach is correct in isolation -- the right structure depends on the investor's full financial picture, which is exactly what should be discussed before, not after, choosing a specific property.
BNB Accelerator's acquisitions team, led by Nick Korom, screens over 1,000 short-term rental listings a week and hand-delivers the roughly 2% that clear underwriting. Book a free consultation to see what a done-for-you short-term rental acquisition looks like for your situation.