Orlando short term vacation rentals - advice

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Orlando short term vacation rentals - advice

Tyler Erickson
Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes

Hi everyone, 

I'm considering purchasing a property in Orlando close to Disney World for both personal use and also for investment purposes.  Looking to connect with anyone who already has a vacation rental in Orlando, to get some advice.  Thanks in advance for your help!   

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Aaron May
Rental Property Investor · Grand Rapids, MI · Member since 2019 · 22 posts · 19 votes
5y

Hi Tyler - I understand your hesitation, but the Orlando market lends itself to self managing from a distance better than just about anywhere else. The reason is simple, there are more hospitality professionals in Orlando than anywhere in the country, perhaps the world. Meaning, you can piece together a great ground team, while not paying for services you don't need or want. I have a "Property Manager" who coordinates all cleanings and maintenance, handles ALL renter issue response, 7 days a week, and handles all of the upkeep needed with the property (preventive maintenance, pool care, pest control etc) . In our case, the HOA handles lawn care, trash removal, etc.

This means I get all of the renter response, and all property function coordination, for a few hundred bucks a month and I really just handle the bookings from a distance (i'm based in Michigan). This saves $10,000 - $15,000 a year per property (I have 3 in Florida), and I just have to manage the channels and handle financials and paperwork, which i'd just assume have control of anyways. I would estimate that I have 2-3 hours a week into my side. That's $30,000 - $40,000 net, more, for my little portfolio and well worth the time investment. 

Additionally, the management in the Orlando market usually falls into one of two categories; terrible, inexpensive management that will do anything they have to do to fill up your calendars to jam your property full of guests so they can make their commissions, while allowing your property to fall into disrepair. These companies have very low retention, for obvious reasons, so their model is to essentially milk it for whatever they can before they get fired. The second category would be the good or even great management companies who will take great care of your property and will do a much better job with the guest experience. However, they charge 20-25% commissions on gross rent, and nickel and dime you with fees every step of the way. In the first scenario, you make a gross profit but it will most likely disappear when you consider the wear and tear and the replacement costs associated with that aggressive and reckless approach. In the second scenario, your house is in better hands so the asset is cared for but the management company soaks up all of the profit. 

Either way, these types of purchases should be for a lifestyle investment (somewhere to escape to a few times a year, and pays its own bills when you aren't there), or a cash flow investment (in which case, you need to consider self management, in my opinion).. You cannot buy these properties with any assumption made for appreciation. They don't float up and down with the rest of the real estate market, they feel more like businesses than they do homes in that regard. 

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    7y

    Hi @Tyler Erickson, check this out:

    https://www.orlando.gov/Buildi...

    Should get you started. There are not too many in the close to DW area. I am wondering about laws and restrictions. How close is close? Most seem to be over 5 miles from the park.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Interesting. I stayed in an AirBnB in Orlando in 2018 and it was definitely the whole house. Are some properties grandfathered in?

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    0Reply
  • Tyler Erickson
    OP
    Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes
    7y

    Thanks Michael. Given their reliance on the tourism industry, it seems like Orlando would encourage, or at a minimum welcome, short term rentals. Also seems like there is a lot of competition. Anyone have experience with this? I'm seeing a lot of properties for sale on the MLS, as well. Anyone have tips to stand out and differentiate from the thousands of other short term rental properties?

    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    7y

    Maybe you could be right outside the city limits and still be close enough?

    0Reply
  • Denise Reis
    Member since 2019 · 3 posts · 3 votes
    7y

    I own a property in Davenport about 15 min from Disney. We bought it a year ago for investment and vacation use. I will tell you that I have been rented most of the time. However, there is so much competition in the area you really need to adjust your pricing or offer specials ie.free pool heat to stay booked in the off season. 

    2Reply
  • Tyler Erickson
    OP
    Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes
    7y

    Thanks Denise.  Is your property turning a profit? 

    0Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    7y

    @Tyler Erickson

    I purchased a 7 bedroom home in championsgate and have had good success so far. You need to look in resort community that is made gor and zoned STR, mostly in Osceola county. There is a lot of competition but it's all about marketing your property. Give @Keith Courtney a call he is the vacation rental expert Realtor down there and helped me tremendously when I was searching.

    2Reply
  • Denise Reis
    Member since 2019 · 3 posts · 3 votes
    7y

    Tyler, yes we are making a profit. I book all my own bookings and do very well on Airbnb. I’m in Polk county right by Orange County very near Kissimmee. I think location in key. I get asked how far from Disney, and Kissimmee all the time. My biggest issue has not been booking as I’m booked most of the time, it’s been properly management. I’m considering doing this without a property manager. 

    1Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    7y

     If you can tie your shoes with your eyes closed, you can be a property manager.  I have 23 STRs.  83 beds total.  

    3Reply
  • Tyler Erickson
    OP
    Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes
    7y

    @Paul Sandhu - thanks. How much time do you spend managing all those STR's? Do you do it all yourself or do you have others to help you?

    @Denise Reis - Would you mind sharing how much you're paying for your property manager?  .......and what your issues have been with your PM? 

    0Reply
  • Tyler Erickson
    OP
    Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes
    7y

    also - @Joey Morea - would you mind sharing what you are doing to effectively market your property? 

    0Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    7y

    @Tyler Erickson

    Have listed with VRBO and Airbnb. Everything is done on those platforms once you set up all your templates and such it really is not that hard. It’s just like texting people I find if you are super helpful the guest are good to your property I also own a condo in Panama City beach. I think it’s key to have good boots on the ground there. I do have a good PM that i pay a flat monthly fee to and he makes sure my pool is clean, organize the cleaners, etc and if there is an issue with the guest or house he will take care of it.

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    7y
    Originally posted by @Tyler Erickson:

    @Paul Sandhu - thanks. How much time do you spend managing all those STR's? Do you do it all yourself or do you have others to help you?

     5 minutes to 5 hours a day.  But probably 2-3 hours a day on average.  Wife does all the cleaning.  Her time is not included.

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    my advice to Florida or gulf coast STR wannabees is to ask yourself if you want to be in a panic state 4 times a year every time a tropical storm or hurricane MIGHT go over your rental(s)?

    I won't invest in coastal area -the hurricane zone (TX to NC) nor in the American southwest due to potential future megadroughts.  Lake Mead's dropping since 1983 is a warning sign to me.  

    Plenty of good areas left over.

    0Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    7y

    @Ken Latchers

    I think this forum is for sharing information and not for people political thoughts and personal opinion on climate change etc. You don’t have to invest there but I am happy with my returns so far. I actually just got a 3800 booking for a week in March just moments ago, so wouldn’t say wannabe!

    6Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    no political thoughts. as to ignoring reality, that is not really on my agenda.

    2Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    7y

    @Ken Latchers

    So where are your favorite and well producing STR markets outside of the southeast and southwest?

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    reasonable tourist/urban areas having constant visitor stream close to your location with low cost housing that you can self manage.

    0Reply
  • Melissa Jolley
    Rental Property Investor · Niceville, FL · Member since 2019 · 89 posts · 62 votes
    7y

    I stayed at an Airbnb in Kissimmee in March. We went to Disney. There were several STR in the resort neighborhood. It seemed to me that in that area the "off season" is much less....however, I can see the competitive aspect of it. The particular home we rented was dirty. I believe we paid $150 a night for a 4BR 3BA home with a pool. While we were there I was looking up how much the home cost....it was only $200K.

    0Reply
  • Tyler Erickson
    OP
    Investor · Farmington, UT · Member since 2016 · 17 posts · 8 votes
    7y

    @Melissa Jolley - yeah, I'm seeing properties around that price range as well.  

    @Ken Latchers - I'm not worried about hurricanes, tbh.  I'm more than willing to take on that risk.  There are tons of tourists who visit Orlando all year round.  

    Everyone - Vacancy rates are the unknown for me, I guess.  If I can fill it, profits are there.  If I can't fill it because I can't compete with all the other properties out there, I'm a little worried.  I did a quick search on VRBO and found more than 3,000 properties available to rent during a particular week in November, about a month out from now.  

    How do I stand out above the other 3,000 properties, and get ppl to stay in my place for that week instead of someone else's? Am I overthinking this? Do I just need to price it right? Is there more to it than that? Anyone have any figures that show the total Orlando STR pie? ........and what gets rented and what doesn't? ..........wondering how saturated the STR market is in Orlando.

    1Reply
  • Elizabeth Shelby
    Investor · Kissimmee, FL · Member since 2016 · 42 posts · 24 votes
    7y

    Hi Tyler, I am a realtor in Kissimmee and ran a STR property management company for seven years, so I have a lot of experience with STR's. The property you intend to buy needs to be in a community zoned for short term rental and most are not. You need an agent that can send you properties in those communities. You will need to be licensed by the State, County and if applicable the City. Most vacation rental properties are sold furnished and in some cases future bookings transfer at closing to the buyer. Orlando has a lot of areas that neither you, your family or renters would want to be staying in so you need someone that knows the area well. Davenport, Kissimmee, Championsgate are all good vacation rental areas but again not all communities are zoned for short term rentals. Vacationers don't want to be more than 20 minutes travel to the major theme parks. There are sites to advertise that only charge a yearly fee, like HomeandAway, VRBO used to do before they were bought out by Expedia.

    I have templates for clients who buy short term rentals to adapt to their property so they can respond quickly and efficiently to enquiries, take bookings and refund deposits etc.  Why would you want to book a couple of nights a time with AirBnB when you can take a 2 week booking from another site, that's less cleaning time and more likely to attract families rather than party animals....  Good property managers are few and far between as are good cleaners but when you find the right one for you they are like gold.

    Good luck with your research and if I can be of help just let me know.

    6Reply
  • Erik KuhiPro Member
    Investor · Farmingdale, NJ · Member since 2017 · 63 posts · 39 votes
    7y

    @Denise Reis I’ve been using 1st for Orlando for property management and they’ve been great so far. I’ve only been doing this for a year so far but I’ve been very happy with my experience so far.

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    We were in Orlando just a few months but stayed at one of the Disney resorts, but when we went out, say, to Walmart or the shopping mall, everywhere was buzzing with people and you can tell it was a global crowd. 

    As a RE Investor, I remember thinking whoever is doing Airbnb here is probably crushing it! 

    I think @Elizabeth Shelby makes a lot of great points and you should be fine if you build a strong boots-on-the-ground team. 

    0Reply
  • Erik KuhiPro Member
    Investor · Farmingdale, NJ · Member since 2017 · 63 posts · 39 votes
    7y

    @Tyler Erickson

    I’ve owned a vacation rental in Kissimmee for almost a year now and I’ve been pretty happy so far. I was booked out a month and a half as soon as I began taking bookings. I only use VRBO so far. I created my list last January but kept blocked until mid February because the property needed a little work and to be furnished. Within the first 2 weeks I received a booking for the second half of February and shortly after that March was completely booked with the exception of 2 or 3 days that fell in between bookings. April was ok but May and the beginning of June were my slow season. It’s been steady ever since and the rest of this year is looking decent. I’m confident 2020 will be much better and hope to gain the momentum to purchase a second property in the area.

    If you have the opportunity I would go for it. There is a lot of competition but I’ve learned that just with a little effort answering guests questions and showing them you care about their experience puts you ahead of most of them. Make sure your property is clean and has decent amenities and you’ll be in good shape.

    Feel free to PM me if you want more details and recommendations. Just remember though I’m still just a rookie myself so my knowledge is still a little limited but I’m more than happy to share what I have.

    1Reply
  • Melissa Jolley
    Rental Property Investor · Niceville, FL · Member since 2019 · 89 posts · 62 votes
    7y

    From the outside looking in.....it would have really helped if the host made simple things available. We ended up having to run to the store for dish soap, dish washing detergent....paper towels. If it were me, I would make it clear on my Airbnb listing that these things were provided. We chose a terrible time to go, but it was the time we had. The first night we had to go to Walmart to grab those items....it took 2 hours. That was the start of our vacation. If a host had provided these things we could have been in the pool for 2 hours. The traffic in those areas can be terrible. Have professional pictures taken. Have furniture that is comfortable and clean (fold out beds would be a plus). The neighborhood that we stayed in had a club house type building that sold things like Ice, drinks and snacks. That was great since we could grab something without getting on the road.

    4Reply
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