Short Term Rental in Orlando/ Disney Area

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Short Term Rental in Orlando/ Disney Area

Shawn Green
Member since 2021 · 8 posts · 2 votes

Hey Guys,

I'm a first time poster as I'm new to the Disney STR world. Id like to get a sense from some STR owners as to some of the assumptions I can make in my general underwriting. I'm in the process of purchasing a 9 BR in Solara Resort.

Firstly, Today as the vaccines rollout to the general population, what is the general occupancy rate ?

How much can i expect for management fees, I've seen ranges of 10-20%

on a 9BR what are the expectations for Utilities? i.e. Gas, water, electric, Pool?

I've interviewed a number of management companies, and have seen pros and cons on mom and pop, vs. large sophisticated. any insights as to how this will playout in Disney. My feeling is that Mom and Pop breathe the home, while larger may have greater access to booking tools?

Also, trying to get a general sense of maintenance and Capex. while the home and furnishings are brand new, what are the general maintenance and repairs expectations ? how often should i expect to change furnishings? i.e. Living room /pool/mattresses?

I would like to transform 2-3 bedroom to super hyper Disney themed. inclusive of slide bunks, wall wrap, lighting, sound etc. has anyone done this and give insights as to the general cost?

lastly, we are strongly considering finishing the garage into a high end game room. what can I expect for cost as to "go all out"

my apologies for the ramble, but any insights would be appreciated ! :)

Cheers,

Shawn

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Most Popular Reply

Serena Kim
Real Estate Agent · Orlando, FL · Member since 2019 · 59 posts · 90 votes
5y

@Shawn Green

What everyone here has said is very true. My four Orlando/Kissimmee STR occupancies' have been > 90% over the past few months, and already booked over 90% for the next two months. I keep increasing prices to levels that would have been impossible 1-2 years ago, and still getting booked. As an example, my oldest 3Br grossed $42k in 2019, $35k in 2020, and should do well above $55k in 2021 at this pace.

I self-manage my own properties, but it took a long time to get a system and people to work well. If you don't like dealing with all the minutiae that comes with working with guests and big houses, I would highly recommend a property manager. Just make sure you are listed at a minimum in Airbnb and VRBO (which used to be < 5% of my business, now growing to 10-20%). 

Now, expenses:

Towels and beddings are one of my main costs - keep 3 sets per bed/person and replace every 1-2 months

Furniture - I've been lucky, haven't had to replace any big piece of furniture (I've had guests brake entrance doors and and other wild things, but those are 1 in 100)

Camera - putting a camera in front of the house was a game changer for me! Amazing how well people behave once they know they may be recorded

Repairs - HVACs seem to have a system for breaking every summer during the hottest days. Expect $200-500 bill in August, even when you give it the semi-annual maintenance. Same with pool water heater. From our 4 houses, 2 had issues this winter (another $200-400 bill). 

Appliances don't seem to break that often. Either the washer or dryer can be expected to malfunction given the very heavy use cleaning bedsheets and towels after every check-out. And guests use it as well, and they rarely clean the dryer vents.

Maybe too much detail, but hopefully this helps out!

Serena

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  • Amanda Ferguson
    Destin, FL · Member since 2019 · 55 posts · 50 votes
    5y

    You should connect with @Piero Millares!  He has a wealth of knowledge on the Disney area and short term rentals.

    2Reply
  • Shawn Green
    OP
    Member since 2021 · 8 posts · 2 votes
    5y

    Thank you @Amanda Ferguson!

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Shawn Green, sounds like a neat place! Have you considered self managing it? Most of us to that here and we are doing it just fine. It should work very well in that area as there will be tons of resources like cleaners and handy people to take care of the place.

    As for the game room, especially on a 9br place, seems to be a necessity. My wife and I were looking at some 3/2 and 4/3 places in the various resorts in that area. While doing my normal research, I looked at the higher end places and I will say a fully Disney themed place looks pretty awesome.

    Some of the game rooms are over the top. Here are some examples and these are rather easy to do:

    These are some places in Windsor Hills. Take a look at all the higher end listings for vacation rentals to get some ideas. Some of the things I saw were amazing. Beds with slides, oversized R2D2 and C3PO models, full castles from Frozen. The list goes on.

    I am curious to how you think you will do. Most of the large places I saw were around $250-$300 a night for a 9/5. I did look in Solara and they do seen to bring a bit more around $350 a night.

    This place gets over $500 a night in Solara to give you an idea of decor:

    1Reply
  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    5y
    Originally posted by @Michael Baum:

    Hey @Shawn Green, sounds like a neat place! Have you considered self managing it? Most of us to that here and we are doing it just fine. It should work very well in that area as there will be tons of resources like cleaners and handy people to take care of the place.

    As for the game room, especially on a 9br place, seems to be a necessity. My wife and I were looking at some 3/2 and 4/3 places in the various resorts in that area. While doing my normal research, I looked at the higher end places and I will say a fully Disney themed place looks pretty awesome.

    Some of the game rooms are over the top. Here are some examples and these are rather easy to do:

    These are some places in Windsor Hills. Take a look at all the higher end listings for vacation rentals to get some ideas. Some of the things I saw were amazing. Beds with slides, oversized R2D2 and C3PO models, full castles from Frozen. The list goes on.

    I am curious to how you think you will do. Most of the large places I saw were around $250-$300 a night for a 9/5. I did look in Solara and they do seen to bring a bit more around $350 a night.

    This place gets over $500 a night in Solara to give you an idea of decor:

     Does Solara rent out as well as Champions Gate?  It looks like there are some nice already-themed places available in Solara whereas the leftovers in Champions Gate are only a little cheaper and would require paying up for all the theming.

    I get the impression the resort amenities in Champions Gate are better though.

    Cosmic Vacations4.9172 Reviews
    WebsiteView Page
    1Reply
  • Shawn Green
    OP
    Member since 2021 · 8 posts · 2 votes
    5y

    @Michael Baum thank you for your reply! Love the option you present, I’ve seen those and intend to go inline with the “industry standard” do you have rough  estimate range that I can expect?

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Shawn Green, man that is a tough question. Some of those places seem amazing to me. The decor is over the top. There is one game room I saw (I couldn't find it) that had 3 2 seat driving arcade systems which go for over 10k each plus a pool table, Foosball table and 3 console stations. They had to have over 100k in that room alone.

    I would take some time researching what pre-made stuff there is that can fit the bill then modify from there. Those murals look painted to me rather than a big "wrap". Drywall that has a pebble finish will mar the overall look so that might have to be sanded off? I just don't know.

    The places we looked at were 1/2 the size of your place and are more of a bargain for visitors rather than an over the top experience like you are planning so I never really looked into that sort of decor.

    I will say that the prices didn't justify the nightly rate. 60-90 a night just doesn't cut it on a 350k purchase for us. Especially when that segment is so saturated with rentals in those resorts. The competition drives that nightly down to the ground.

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

    @Shawn Green  First off...Happy St. Patricks Day to you sir!

    I have clients under contract or just closed in 3 different communities and I've seen so many of these homes lately including new construction community that is going up, so I have some first hand knowledge of them. 

    There are really so many variable that go into your questions. First off, IMO, for a home that size, you will get much better returns going with a larger PM. I have an awesome one that does direct to tour operators and that means more bookings, longer stays and premium rates..you won't be competing with mom and pop or self managing that really only have access to airbnb, VRBO etc. The rate is 20%, but you can use the unit yourself and book and only pay $50, rather than 20% and still get the advantage of the PM, cleaning etc. Bookings are getting much better right now (spring break, easter and more planes are flying!) 2022 is filling up well also in anticipation of everything being open.

    Theming is a huge deal, it can really separate you from the crowd. Tour operators will require you have at least two themed rooms and a game room (usually garage). The 3/4 bedroom homes and townhomes can't compete with that either. I have a great contact that does the high end themes, wraps, game rooms and garage conversions, they do a fantastic job.

    Let me know if I can help in any way or if you have other questions.

    3Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Shawn McCormick, so you pay $50 to stay at your own place? Is that per night or for the whole stay? For the 20%, do you do zero work? Just collect a check?

    Those tour operators, do they only take huge places?

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

    @Michael Baum. So I don't work for the PM, but the way the structure it is if you want to book a stay for your friends or family and block off holidays or whatever..instead of the PM taking 20%, they only charge $50.

    The 20% is for them to do everything, market, manage, maintain, book, clean etc. And if you get the right one, they should be able to get you more $ per night, more nights per month, keep on top of regular maintenance issues by doing spot inspections to watch for wear and tear etc that would be missed or unreported if you self managed..causing bad reviews...causing lower bookings. IMO the 20% more than covers itself, even with one unit.

    Yes, the tour operators will generally go for 7-9 bedroom homes. If they have a group of 300 cheerleaders or tourists, they want them all to stay in the same community and deal with one company that manages enough homes there to accommodate them all. They will usually pay a premium to make sure that happens. they don't want to be dropping off guests at 3 or 4 different resorts and trying to keep track of all that and dealing with several PM companies with all different rules, pricing etc. 

    2Reply
  • Kristine Eickman
    Investor · Minneapolis, MN · Member since 2011 · 84 posts · 31 votes
    5y

    Just a thing to note here. Large management companies do not allow you control of your own home. They essentially take it over and you have zero control at that point. I would never, ever run my homes this way. Yeah, they may get you bookings, but with who? These homes are often beat up beyond belief by these tour groups that they put in your homes and you have no say about it. Management companies do not care about your home because it is not THEIR home. There is a reason so many people do self-management and this is one of them.

    2Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Thanks for the info @Shawn McCormick! Really appreciate it!

    @Kristine Eickman, I agree with you. I was curious about the 20% and what you got for that. I self manage with no issues but that 20% might work for some if you can follow their track record.

    0Reply
  • Kristine Eickman
    Investor · Minneapolis, MN · Member since 2011 · 84 posts · 31 votes
    5y
    Originally posted by @Michael Baum:

    @Kristine Eickman, I agree with you. I was curious about the 20% and what you got for that. I self manage with no issues but that 20% might work for some if you can follow their track record.

    I agree - there is definitely a market for people who want to be completely hands-off. I just want to make sure that new STR investors in the Disney market understand what they are giving up when they basically hand their keys over to a company. I know there are a lot of hands-off investors in that market and I think it does work for them, but at what cost. I just could not imagine spending $500K+ for a home and then not having any control over it.

    0Reply
  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    5y

    Unless that $50 covers the cleaning fee when you leave it seems utterly absurd to me that a PM would charge you money to use your own home.  What exactly are they providing for that $50?  There's no marketing involved in getting you to use your own home, there's no guest communication during your stay required, etc.

    I realize $50 is nothing in the grand scheme of things but the idea of paying someone $50 to let me use my own home that I own is ridiculous.

    Again though, that is assuming you are paying the cleaning fee on top of this.  If this covers the cleaning then nevermind.

    Cosmic Vacations4.9172 Reviews
    WebsiteView Page
    1Reply
  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y

    @Kristine Eickman

    I literally could not have said this any better. Bravo for your comment.

    Most of the management companies in Central Florida are pretty bad in my opinion. My plan is to bring it in-house.

    0Reply
  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y

    @Ryan Moyer

    When i read the $50 for staying in your own home i had the same reaction as you. I actually laughed out loud. How a LM company could charge the hand that feeds them is absurd.

    0Reply
  • Serena Kim
    Real Estate Agent · Orlando, FL · Member since 2019 · 59 posts · 90 votes
    5y

    @Shawn Green

    What everyone here has said is very true. My four Orlando/Kissimmee STR occupancies' have been > 90% over the past few months, and already booked over 90% for the next two months. I keep increasing prices to levels that would have been impossible 1-2 years ago, and still getting booked. As an example, my oldest 3Br grossed $42k in 2019, $35k in 2020, and should do well above $55k in 2021 at this pace.

    I self-manage my own properties, but it took a long time to get a system and people to work well. If you don't like dealing with all the minutiae that comes with working with guests and big houses, I would highly recommend a property manager. Just make sure you are listed at a minimum in Airbnb and VRBO (which used to be < 5% of my business, now growing to 10-20%). 

    Now, expenses:

    Towels and beddings are one of my main costs - keep 3 sets per bed/person and replace every 1-2 months

    Furniture - I've been lucky, haven't had to replace any big piece of furniture (I've had guests brake entrance doors and and other wild things, but those are 1 in 100)

    Camera - putting a camera in front of the house was a game changer for me! Amazing how well people behave once they know they may be recorded

    Repairs - HVACs seem to have a system for breaking every summer during the hottest days. Expect $200-500 bill in August, even when you give it the semi-annual maintenance. Same with pool water heater. From our 4 houses, 2 had issues this winter (another $200-400 bill). 

    Appliances don't seem to break that often. Either the washer or dryer can be expected to malfunction given the very heavy use cleaning bedsheets and towels after every check-out. And guests use it as well, and they rarely clean the dryer vents.

    Maybe too much detail, but hopefully this helps out!

    Serena

    7Reply
  • Shawn Green
    OP
    Member since 2021 · 8 posts · 2 votes
    5y

    @Serena Kim thank you! This info is super helpful!

    0Reply
  • Duane Richards
    Cedar Hills, UT · Member since 2019 · 68 posts · 43 votes
    5y

    Hi @Shawn Green , I'm a long-term rental investor currently and am now looking to move into a STR market, also in Kissimmee/Orlando, primarily because we love vacationing there and want to have a unit that we could leverage for our family as well. Just curious if you've had any luck?

    @Serena Kim I'd be interested in touching base with you about your property management strategy out there, as we have systems in place for our SFH rentals (long term) and self-manage them all. But remote management seems a bit more tricky, especially with higher turnover for STR. I've looked into Evolve Management (evolve.com) and they seem pretty good for a 10% fee, but I'd want to do more research on them and other PM organizations before fully committing to one.

    I've been told that financing condos out there can be difficult (condo vs fee simple), and I do see that some listings have only "cash" terms listed, but there are a few at least that claim conventional is an option. Is anyone familiar with the restrictions? I believe they are likely imposed by Freddie/Fannie due to the large % of investment units vs non in each development. If conventional isn't available, and we don't quite have the $$, are there other options for financing?

    Also looking for a good real estate agent willing to help us explore the market. I know things are crazy down there, but a few of the questions I have are difficult to find the answers on my own.

    Thanks!

    0Reply
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