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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  • Nadia Hale
    Member since 2021 · 42 posts · 9 votes
    5y

    @Aaron May

    Just saw your two properties online . Beautiful! I was wondering how you went about finding the maintenance and cleaning folks in Orlando ? Also did you purchase new from Lennar or resale ? 

    0Reply
  • Tyler GibsonBusiness Member
    Real Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Nadia Hale:

    Hi al We stayed in champions gate resort recently  ( the villas 5 bed 5 bath) and we loved it . Anyone has experience with the champions gate properties ? Do they rent well with high occupancy rates ? What about  the hoa ? How much is it ? Is there a good management company there in Orlando that one could recommend ? @Aaron May thanks so much for great advice ! Looks like you own in Champioan Gate... is there a type of property in your opinion in there that works better ? 
    thanks so much !

     Yes they rent well especially right now dice COVID-19. You should connect with @Alice Horn and Villa key management. I would be have to chat with you about it. 

    [email protected]407-590-9858
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  • Alice Horn
    Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes
    5y

    Hi @Nadia Hale,

    So glad you liked Championsgate! We manage quite a few properties there and they do very well. Families are renting them for reunions after so many months of being apart after Covid. As European travel opens up again, we expect the demand to continue strong!

    Thanks @Tyler Gibson for the shoutout. @Nadia Hale, we are happy to share revenue and occupancy stats on any Championsgate homes you might be considering.

    Happy 4th, everyone!

    0Reply
  • Nadia Hale
    Member since 2021 · 42 posts · 9 votes
    5y

    @alicehorn

    Hi Alice would love to chat sometime . Let me know how to connect . Thanks 

    0Reply
  • Shawn McCormickPro Member
    Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes
    5y

    @Nadia Hale Championsgate is one of the top tier communities for STR. Due to all the amenities, it has compared to other similar properties, plus it has golf so that opens up to a whole different segment of vacationers. I just had a client close last week on an 8 bedroom and they had 17 bookings scheduled on the first day. Demand is extremely hight right now and expected to stay that way especially when other countries can start travelling here again.

    I have a great property manager contact if you would like to speak with them about potential revenue in Championsgate and other similar properties.

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  • Nadia Hale
    Member since 2021 · 42 posts · 9 votes
    5y
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  • Nadia Hale
    Member since 2021 · 42 posts · 9 votes
    5y

    @Shawn McCormick thanks for the note . I am interested in pricing as well and where to buy .any thoughts ? 

    0Reply
  • Nadia Hale
    Member since 2021 · 42 posts · 9 votes
    5y

    @Tyler Gibson thanks for the referral! 

    0Reply
  • Alexander Horton
    Member since 2021 · 3 posts · 0 votes
    5y

    @Tyler Erickson Hi Tyler, I just helped a client purchase a unit in a new developing townhome community in Champions gate, FL.

    The community was specifically designed to be used as short term rentals, with resort style amenities and a preferred property management staff ready that handles pretty much everything for you.

    Let me know if you want some more info, the development is only in phase one and should probably have some more units available for under 400k.

    It’s called The Azur Resort if you’re interested.

    0Reply
  • Amit Desai
    Member since 2020 · 56 posts · 22 votes
    5y

    @Nadia Hale hi we bought one this year at Windsor Hills. It’s doing great so far. PM me for more info and yes @Alice Horn is your contact person. She is best.

    1Reply
  • Alice Horn
    Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes
    5y

    Thanks @Amit Desai! 

    0Reply
  • Shawn McCormickPro Member
    Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes
    5y

    @Nadia Hale I sent you a message, looking forward to connecting.

    0Reply
  • Keith Courtney
    Real Estate Brokerage/Vacation Homes/Short Term Vacation Home Rental Marketing · Orlando, FL · Member since 2013 · 159 posts · 127 votes
    5y

    @Nadia Hale
    We have had a big increase in prices for vacation homes here in the Disney World area.  A lot of vacation homes have been purchased, and many of the vacation homes have been purchased "blindly" - the buyers have no idea what it takes to make the homes profitable and be a good investment.

    It may be that a number of those homes will come back on the market within the next 8-12 months. Therefore, the prudent thing to do may be to be patient unless a deal hits the market between now and then.  My experience recently has been every time a deal hits the market, there is a bidding war for it. 

    Good luck with whatever you decide.

    Keith

    1Reply
  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y
    Originally posted by @Keith Courtney:

    @Nadia Hale
    We have had a big increase in prices for vacation homes here in the Disney World area.  A lot of vacation homes have been purchased, and many of the vacation homes have been purchased "blindly" - the buyers have no idea what it takes to make the homes profitable and be a good investment.

     Keith,

    Amen brother.....haha. I have been trying to help tell investors how to buy these STR's and rehab them correctly to really do well in the space but most of them end up doing nothing to the house at all and then complain why their investment isn't performing. Gotta remove that carpet, put some nice paint and furniture in, and I personally always go tile flooring and granite counters.

    It will be interesting to see what happens if the market cools a bit and what all of these new investors do with their homes.

    1Reply
  • Lily Yuen
    Member since 2021 · 1 post · 0 votes
    5y

    Would any of you recommend Margaritaville Orlando? I am curious if a resort/hotel type home would do well in STR. There is a wait-list to purchase the villas. Would a 2-3 bedroom villa do well to generate STR income?

    0Reply
  • Tyler GibsonBusiness Member
    Real Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Lily Yuen:

    Would any of you recommend Margaritaville Orlando? I am curious if a resort/hotel type home would do well in STR. There is a wait-list to purchase the villas. Would a 2-3 bedroom villa do well to generate STR income?

    I know they have limited choices on management for STR. I don't think they are great cashflow investments. I see Margaritaville as more of a personal buy and rent it out to offset the cost.

    [email protected]407-590-9858
    GPG Team 598 Reviews
    WebsiteView Page
    1Reply
  • Alice Horn
    Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes
    5y

    @Keith Courtney, I couldn't agree more. For all homes (and especially our remote investors purchasing resales), we conduct a detailed "ready to rent" checklist, and make recommendations for decor, maintenance and inventory. This gives them peace of mind that their home will perform well and get good reviews. In general:

    • 1. Furniture must be up to date and on trend (those GIANT 4 poster dark brown beds gotta go!)
    • 2. Walls should be neutral (light grey or white) with pops of color to make the listing stand out
      3. Themed bedrooms are a must, especially in larger homes. Invest in nice wallpaper and decorating touches, not just a few decals!
      4. If there is room for a game room, that will help book your home. Remember, broken or worn equipment will lead to bad reviews.
      5. Pay attention to your pool area. Is the furniture worn? New furniture, bright cushions etc. will add appeal in the listing
      6. Carefully check your inventory. If your kitchen is missing critical items, that will lead to bad reviews.
    • 7. Invest in hotel-quality white linens for the beds. There is no greater turnoff than old and stained comforters.

      As far as timing, it is tricky but we are seeing many investors taking advantage of the low interest and immediately booking up their home for several months at great rates. Sure, it takes persistence and yes, many are making multiple offers. Home prices are up, but booking rates are also way up. As always, run detailed projections to make sure the deal works! 
    0Reply
  • Keith Courtney
    Real Estate Brokerage/Vacation Homes/Short Term Vacation Home Rental Marketing · Orlando, FL · Member since 2013 · 159 posts · 127 votes
    5y

    A quick comment regarding the above posting by Alice Horn - She said she couldn't agree more with me, but she is advocating to still buy short term rental vacation homes here at the inflated prices.  That's contrary to what I am saying.  In some cases you can pay the higher prices for some vacation homes today and still make money at the moment.  Here is the problem - You pay the inflated prices, and you will also be paying inflated costs to renovate a home, which you must do to maximize profits.  An important part of any investment is an exit strategy.  If prices back down as I think they are going to do, then, when you sell your home, you will most likely lose money on the sale. 

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