STR evaluation in Kissimmee(Reunion)

[Himateja Madala]

Hey folks,

I am brand new to STR's and am here looking for suggestions around STR in Kissimmee area. I have an opportunity to purchase a 2019 built 6 bed/6 bath 3300 sqft (Pool/spa, media room, full size garage) fully furnished STR in Encore Reunion community @ 180 per sqft costs me 600k. Property is in great condition since it is newly built but not themed currently but i am hoping to theme it and write off as expenses. Property was on market for about 170 days

I originally started the STR plan for tax benefits and plan to do cost segregation as i fall into high income bracket (37%+ 11% state) saving around 50k for 600k property.I have no plan to personally use the property and this is purely investment

I thought i found a great deal because properties in the area are selling for 205-220 per sqft. But then i ran numbers and realized that at current rates i have to pay 4300 (3300 Mortgage, 1000 Prop taxes ,900 HOA) . Income for 2024 is 66k gross as i believe the owner didnt put effort to gather high ratings or make it perform.I was hoping to write off the negative cash flow against my w2 income. I am out of state and have to use a property manager which is another expense.

Also hoping that since 2023,2024 travel has softened the cycle will reverse in 2025. Hoping Orlando travel will pick up next year with new parks opening(EPIC universe).

AirDNA data shows that few properties have done 80k-90k in the area with theming.

It all sounded convincing untill i see loopholes in my own plan.  I dont know for sure when rates will come down so i can refi. 

Also purchased because realtors told me that 180 per sft is really low for the area and that its a great deal. 

Any seasoned investors pls share your thoughts. Are the tax savings worth all the hassle of STR. Should i buy a property that negatively cash flows?

Is kissimmee still a good area for STR or saturated. Long term is it a good investment.

Thanks

Himateja

P.S: I believe the seller is going lower because the property has a relatively smaller pool/backyard . However the property has a freeway behind it and hence no rear neighbors /more privacy.

[Ashish Acharya]

@Himateja Madala Purchasing the Kissimmee STR at $180/sqft offers potential equity and tax savings through cost segregation, especially for a high-income earner like yourself. While AirDNA suggests revenue could reach $80K–$90K with theming and strong management, the current $66K gross income and $4,300 monthly expenses result in negative cash flow, which may persist until rates drop for refinancing. Property with negative cash flow is not recommended to be honest. Playing an appreciation game can be risky. Tax saving might change you ROI so focus on meeting those rules if you are going to close on it.

Kissimmee's competitive STR market requires strategic theming and marketing to stand out, but its proximity to Orlando attractions and future developments like Epic Universe could drive demand.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.