Kissimmee STR/Disney Themed/5/4
Investor · Clermont, FL · Member since 2018 · 26 posts · 17 votes
Kissimmee STR/Disney Themed/5/4
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votesI have heardnthis area is very saturated and then the slowdown on top if that.
I would sell if you can and take the hit, then put that money into something that is making money.
14 Replies
- 1yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
Rents are down in the area and so far have just continued in that direction. At some point hopefully we will bottom out and start climbing back up again, but the reality is we've been hit with the double whammy of both quantity saturation and quality saturation.
That is to say we've gotten both a lot MORE listings in the area (new homes built by the thousands) and a lot BETTER listings (so many more people doing the high level theming now).
I've heard from a local realtor that they're running thin on tourist zoned land to build more of these resort neighborhoods in so maybe over the next few years supply will stay steadier as demand continues in the same steady direction as always.
It's all supply driven right now. Demand is fine. We just got hit with the shock of so many new awesome homes added so fast when the market took off. Champions Gate doubled in size. Windsor Island, WIndsor at Westside, Windsor Cay, etc. If they truly are out of tourist zoned land to keep adding those neighborhoods that should help settle things over the next few years, but I'm not really seeing anything in the near-term now that Epic Universe launched without much effect.
Cosmic Vacations4.9174 Reviews - 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
I have heardnthis area is very saturated and then the slowdown on top if that.
I would sell if you can and take the hit, then put that money into something that is making money.
- 1yErrol GrahamPro MemberInvestor · FL · Member since 2020 · 38 posts · 25 votes
I live in Kissimmee and have long-term rental in the area, and I agree with most of the analysis from @Ryan Moyer. However, I am more pessimistic about the demand for STR picking up, even over the medium term (5 years). One option you may have is to look for an equity partner with a longer-term investment horizon (someone who has some years before retirement) and is willing to ride out the storm. Another option would be to refinance, as rates fall below your current 8.6%.
Also, it's important to finely scrutinize your expense elements, beside the cleaning, including your insurance and taxes. On the insurance, for example, I have found that unbundling peril and personal liability have saved me some dollars. You may also want to challenge your tax assessment, with the hope for some adjustments in your favor.
Finally, since you have very few degrees of freedom on the income and expenditure nexus, you may want to pay particular attention to preventive maintenance to help avoid getting hit with a big capital cost item.
- Property Manager · Orlando, FL · Member since 2025 · 110 posts · 51 votes1y
Quote from @Errol Graham:
I live in Kissimmee and have long-term rental in the area, and I agree with most of the analysis from @Ryan Moyer. However, I am more pessimistic about the demand for STR picking up, even over the medium term (5 years). One option you may have is to look for an equity partner with a longer-term investment horizon (someone who has some years before retirement) and is willing to ride out the storm. Another option would be to refinance, as rates fall below your current 8.6%.
Also, it's important to finely scrutinize your expense elements, beside the cleaning, including your insurance and taxes. On the insurance, for example, I have found that unbundling peril and personal liability have saved me some dollars. You may also want to challenge your tax assessment, with the hope for some adjustments in your favor.
Finally, since you have very few degrees of freedom on the income and expenditure nexus, you may want to pay particular attention to preventive maintenance to help avoid getting hit with a big capital cost item.
I'm going to have to second Errol on this. I am not optimistic for STR in the tourism hub of CFL. Supply is sky high, and tourism to Orlando is actually down from last year. My firm does property management for LTR, and in the last six months, we've seen many STR owners approach us looking to convert to LTR and place tenants on 12 month leases...because Airbnb dried up for them so much just like you're seeing. I think your best course is to ride it out until you can refi and then hopefully get our from under that interest rate that is making it damn near impossible for you to cashflow.
- New to Real Estate · Miami, FL · Member since 2020 · 28 posts · 7 votes1y
@Errol Graham Hi Errol! I was curious how the LTR market is looking like in Kissimmee and if it seems like factors for increasing demand for LTR such population growth and job supply are starting to pick up in Kissimmee or will pick up in the future. I live in the Tangelo Park area right above Williamsburg and the high supply has made the low house prices attractive as a prospective buyer. Would love to connect! Thanks!
- 1yErrol GrahamPro MemberInvestor · FL · Member since 2020 · 38 posts · 25 votes
Quote from @Steven Rodriguez:
@Errol Graham Hi Errol! I was curious how the LTR market is looking like in Kissimmee and if it seems like factors for increasing demand for LTR such population growth and job supply are starting to pick up in Kissimmee or will pick up in the future. I live in the Tangelo Park area right above Williamsburg and the high supply has made the low house prices attractive as a prospective buyer. Would love to connect! Thanks!
Hi Steven,
The LTR market is also difficult but you can still cash flow if you bought before the interest rate hike and are able to keep your expenses in check. Importantly, with more LTR coming on the market in part, due to the switch from STR to LTR by some investors as the STR market sours, it more important to manage vacancies and be willing to hold or even lower rents in some cases in order to avoid both vacancy and the costs associated with getting the property back on the market.
A key takeaway from the current developments in the market is to buy right in the first place and it’s better to go in for fixed rate over 30 years and have a fixed mortgage commitment rather than run the real risk of getting hit with a double whammy or rising interest rates and falling rental rate!
Another key takeaway is to not over leverage so that you can afford to build up reasonable levels of reserves to deal with unplanned vacancy of capital items.
internal migration from places like New York etc has been driving the population growth, mainly of people of retirement age. Job creation is mostly in the service sector and that appears to be slowing. This is in part why housing inventory, including new construction is building up.Overall, still is good investment market but you have to go in with your eyes wide open.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes1y
I hate to tell you this but there's really nothing you can do. I have one in 4 Corners and the last 2 years bookings have been in the toilet because I'd rather have an empty house than compete with bottom-feeder cut-rate properties. You've done a great job on the house and your location is fine, but to be honest the only reason you're staying that booked up is because you've got cheap rates compared to the competition.
Until some of the supply comes off the market (if ever) you are going to either have to live with lower prices or more vacancy. You at least have the advantage (option) of doing some on-site property management, versus guys like me that have to use some kind of remote management (I have a caretaker, so I do most of the actual managing myself) to try to cut some of your costs. It's not a good market for STRs down there unless you bought 10-15 years ago.
Skyline Properties - MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
I couldn’t get the link to work but it sounds really nice. Unfortunately it doesn’t seem like this is going to be a money maker any time soon and probably not a great AA for a majority of anyone’s retirement nest egg. Having to clean a house after strangers to break even sounds pretty awful to me. I’d consider selling, utilize a fee for service financial advisor if needed and move on to enjoy retirement.
- 1yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
Orlando/Kissimmee is a very tough market. In my opinion its a 1 trick pony, the vast majority of travelers are coming in for one reason and one reason only, the parks. If they increase price, or airfare goes up, or anything you will be severely affected. The other issue is a massive oversupply of inventory in the area. At least twice per month I have new clients call me and think they have a super good idea to buy an STR near the parks. Its not a bad idea, in fact its a good idea. Such a good idea that way too many people do it and its lead to the oversupply issue. The only way to get bookings is compete on price and its caused a race to the bottom. There still are properties at 3% rates and bought at 2019 prices and you simply cannot compete with them. It is actually great that you are breaking even despite 8.6% rate, I think you should continue to ride out break even until you can refi out hopefully into something in the 5-6% and then you can finally hopefully cashflow. For anyone who has not bought yet, there are plenty of other nearby markets that can be profitable. Good luck!
Vacation Rentals of Florida53 Reviews- Property Manager · Orlando, FL · Member since 2025 · 110 posts · 51 votes1y
Quote from @Andrew Steffens:
Orlando/Kissimmee is a very tough market. In my opinion its a 1 trick pony, the vast majority of travelers are coming in for one reason and one reason only, the parks. If they increase price, or airfare goes up, or anything you will be severely affected. The other issue is a massive oversupply of inventory in the area. At least twice per month I have new clients call me and think they have a super good idea to buy an STR near the parks. Its not a bad idea, in fact its a good idea. Such a good idea that way too many people do it and its lead to the oversupply issue. The only way to get bookings is compete on price and its caused a race to the bottom. There still are properties at 3% rates and bought at 2019 prices and you simply cannot compete with them. It is actually great that you are breaking even despite 8.6% rate, I think you should continue to ride out break even until you can refi out hopefully into something in the 5-6% and then you can finally hopefully cashflow. For anyone who has not bought yet, there are plenty of other nearby markets that can be profitable. Good luck!
I agree, I think it is a very bad time to be buying STR in Orlando, especially near the parks or in Kissimmee. Tourism is down slightly, but since supply is so high, its enough to really put a strain on bookings.
- 1yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
As both an investor in Kissimmee and PM in Kissimmee with around 20 units I have been the biggest bear for the market on this forum for a while now. I saw the writing on the wall with thousands of new units going up and everyone rushing to theme, leading to both quantity and quality saturation. I was warning people off of prices from 2 years ago at those rates.
I will say this though, things MAY be starting to finally turn the other way. Prices have come down a lot, and I do think one advantage to Kissimmee right now is that prices might have bottomed out, and there are some really good deals to be had, whereas other markets are still early in their drops so there is a lot more risk that you're buying something that may drop 20-30% in value over the next few years. In Kissimmee, that's already happened. 9br homes in Champions Gate were $900k+ a couple of years ago, now available in the $600k range or a little bit more with theming already done.
With prices dropping a lot, the returns relative to gross revenue are starting to look attractive. The big thing people overlook that dampens that a bit is that costs are very high in Kissimmee compared to most markets. For starters there are HOA fees of around $500. Electricity on the big houses is going to be $600-$900/mo. And maintenance costs are high because these are high occupancy houses packed with people, mostly kids, that are very hard on the house. You'll have to steam the carpet/couches and repaint the walls and flush the A/C and fix the fridge etc more often than most markets.
But on raw numbers, I just found a client a turnkey themed out 8br for $715k that I have two almost exact comps in my portfolio currently doing $120k-$130k a year. Where else right now can you buy $715k turnkey (furnished, etc) for $120k gross with no value add?
If value add is your thing, there are 100 copies of that same house unthemed that you can get in the $600k-$650k range and do $100k in theming to hit those $120k gross rents numbers. Again, elsewhere $600k pp + $100k renovations for $120k gross is doable, but it's not as easy/straight-forward.
Again, the key in Kissimmee is proper underwriting. Most people way underestimate their costs. So if you can do $120k gross on $715k purchase in another market your actual net is going to be better. But people that bought at $900k with 8% interest are panicking right now and with the right deal it can make a lot more sense now than it did two years ago even though rents have dropped over that same time frame.
Cosmic Vacations4.9174 Reviews - Property Manager · Erie & Millscreek PA | Maggie Valley & Haywood County NC · Member since 2024 · 264 posts · 119 votes1y
@Michael Trinsey
Hi Michael, with 80–90% occupancy and 95% 5-star reviews, you’ve built a really solid base. I’d experiment with setting a higher minimum in Pricelabs (closer to $240–$260) since your demand is strong, and really market the murals as a unique Disney-themed draw. Direct bookings and small upsells (pool heating, early check-in, etc.) can also boost cash flow. Selling now at a loss feels premature. A few tweaks might get you much closer to your break-even point.- Investor · Clermont, FL · Member since 2018 · 26 posts · 17 votes1y
Quote from @Benjamin Louie:
@Michael Trinsey
Hi Michael, with 80–90% occupancy and 95% 5-star reviews, you’ve built a really solid base. I’d experiment with setting a higher minimum in Pricelabs (closer to $240–$260) since your demand is strong, and really market the murals as a unique Disney-themed draw. Direct bookings and small upsells (pool heating, early check-in, etc.) can also boost cash flow. Selling now at a loss feels premature. A few tweaks might get you much closer to your break-even point.
Thanks Benjamin Louie. You give me hope.
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