Is Kissimmee Oversaturated?
Looking to get into the STR property market (currently own LTRs in Ohio with one STR in Miami) and I was looking at Kissimmee as a starting point. I vacationed pretty frequently in the area, so I know that there are a whole lot of STRs there and its probably one of the most competitive markets. Based on that are people steering clear of that area or are you going in and just really differentiating your property with great theming/amenities and having success with high occupancy rates?
I would certainly say there are quite a few rentals occupying the space but more often than not the owners are being ineffective of appealing to the abnb/vrbo crowd.
Do it right and I have seen great returns. Personally I prefer davenport and four corners area over Kissimmee, however there are cheaper taxes there and generally a lower purchase barrier for entry.
@Wayde Hall
Any issues with distance from theme parks for davenport properties? Or have you not found that to be an issue? I tried to shoot for 15 min when I would stay in the area whereas davenport is a little further away.
25 min Maximum for me is preferred. Due to Orange county restrictions you'll find it extremely difficult to find something that is <15 min to Disney. Our market is not just distance to Disney but more interior of the home and neighborhood community with distance being "icing on the cake".
The absolute closest Ive actually been able to find for single family is actually that 15 min mark because of traffic with avg around the 20 min. I-4 simply backs up and theres no fluid way to take straight to Disney. They are however building a straight path from Champions Gate to HW-192 which will help with commute drastically where it bottles up on I-4 at exit 58.
We own three in champions gate and I would definitely recommend going all in if you're going to invest. We have to theme our properties out pretty extensively but the returns are there if you're willing to go above and beyond.
You seem to already have the right idea. For a regular, nice house yes it's probably oversaturated. You'll be competing with 10,000+ of the exact same house.
If you're willing to put some money into theming, etc to stand out there is still plenty of meat on the bone.
Completely agree with @Ryan Moyer. Sure, there are thousands of vacation rentals in the Disney market. But the majority of homes are fairly average. So here are the things to look out for:
- Location. Obviously, anything closer to Disney is a plus. Windsor Hills and Storey Lake are some of the closer communities. Homes are pricier, but this will be offset by higher rates. We are also seeing increased interest in Emerald Island, an older resort with homes that can be renovated. Championsgate, Windsor at Westside and Solara are a bit further but they have great amenities which are also very popular.
- Updated decor. Those mustard yellow walls, giant four poster beds and 90's decor in general gotta go! Updated decor is a must, and it can often be done creatively so you don't have to refurnish the WHOLE house.
- Pools are a must. Smaller homes and townhomes without pools just don't perform as well. There are a few exceptions with condos that do well, happy to chat about those.
- Theming. Families travel to Orlando for the whole Disney/theme park experience, and they want that experience reflected in the homes. Kids often make family travel decisions. Look for creative theming that can set your home apart and make it a wow for kids.
- Game rooms. Here again, cool lighting, graphics and equipment will set your home apart.
- View from the lanai. If you can find a home with a forest or lake view, that's a plus. If it faces west, even better.
Happy to chat and brainstorm further!
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Property Manager
- VillaKey, LLC
- http://myvillakey.com/owners
- [email protected]
Originally posted by @Wayde Hall:I would certainly say there are quite a few rentals occupying the space but more often than not the owners are being ineffective of appealing to the abnb/vrbo crowd.
Do it right and I have seen great returns. Personally I prefer davenport and four corners area over Kissimmee, however there are cheaper taxes there and generally a lower purchase barrier for entry.
I don't know the Kissimmee market but I can't imagine that it is oversaturated. I agree about Davenport. We've been doing small and medium multi family units there and the market has been great. The Quad Cities and Devenport in particular is an overlooked market that hasn't been oversaturated with investors. It hasn't been overlooked by Amazon however. Amazon just announced that they are building a state of the art distribution center there. Construction has already begun and it is expected to be done in early 2022. They plan to hire 1000 new employees. Personally, I think Davenport should be on any MF investors radar.
@Mike D'Arrigo I’d love to learn more about this area. Most of my knowledge of the space is in poinciana which is the furthest south I’ve been so looking into “true Davenport” would be a nice change. Most of what I deal with is the resort communities in Championsgate or Reunion.
Originally posted by @Wayde Hall:@Mike D'Arrigo I’d love to learn more about this area. Most of my knowledge of the space is in poinciana which is the furthest south I’ve been so looking into “true Davenport” would be a nice change. Most of what I deal with is the resort communities in Championsgate or Reunion.
Wayde, apparently I didn't read your post very carefully. I thought you were referring to Davenport, IA.
Wayde, how are STR in Reunion? Have heard that it is hard to do well due to the high HOA and club fees...
@Robert Buchmann you’re likely referring to Encore at Reunion. Each of the large communities from 4 corners to Davenport have fairly high HOAs but at the same time they see higher nightly rates and occupancy due to the resorts they offer.
Encore is different because they restrict guest access to the clubhouse there unless you use one of the two property managers partnered with the HOA. In there I do traditionally see it harder to cashflow for many.
As a whole, traditional cashflow here revolves around properties that have an experience around them (theme homes). We have a different barrier to entry than most because of what it takes to get that done, but if properly managed and appealing to guest I have seen great returns.
@Wayde Hall what is your opinion on Storey Lake? How is the cash flow there?
@Tiffany Kho Story Lake is a personal favorite, however they have their own issues with security.
Being very close to Disney they will be big contenders in the future but as a new community they haven't established themselves as a return customer community yet. Themes over anything for sure.
Thoughts on townhomes vs single family homes in these communities? Do the townhomes rent just as well? Pros and cons of each?
@Robert Buchmann Single family see better fundamentals as a whole. Townhouses see slightly lower returns comparatively. If you're looking for something easier as townhouses have roof and exterior maintained by the HOA that would be the move. You see larger peaks the larger you go, but as a whole most homes come back to a somewhat similar rates per avg size of the home for the down months. (September-November). You're buying for the peaks, not the lows.
Occupancy and nightly rate as a whole will average much higher based on luxury community and interior.
Quote from @Alice Horn:
Completely agree with @Ryan Moyer. Sure, there are thousands of vacation rentals in the Disney market. But the majority of homes are fairly average. So here are the things to look out for:
- Location. Obviously, anything closer to Disney is a plus. Windsor Hills and Storey Lake are some of the closer communities. Homes are pricier, but this will be offset by higher rates. We are also seeing increased interest in Emerald Island, an older resort with homes that can be renovated. Championsgate, Windsor at Westside and Solara are a bit further but they have great amenities which are also very popular.
- Updated decor. Those mustard yellow walls, giant four poster beds and 90's decor in general gotta go! Updated decor is a must, and it can often be done creatively so you don't have to refurnish the WHOLE house.
- Pools are a must. Smaller homes and townhomes without pools just don't perform as well. There are a few exceptions with condos that do well, happy to chat about those.
- Theming. Families travel to Orlando for the whole Disney/theme park experience, and they want that experience reflected in the homes. Kids often make family travel decisions. Look for creative theming that can set your home apart and make it a wow for kids.
- Game rooms. Here again, cool lighting, graphics and equipment will set your home apart.
- View from the lanai. If you can find a home with a forest or lake view, that's a plus. If it faces west, even better.
Happy to chat and brainstorm further!
Alice (and anyone else who wants to jump in), you mentioned above that there are a few condos that perform well. Which condo communities are getting more demand? I'm guessing they are the ones with the resort style pools (e.g. Regal Oaks)? Does a SFH also benefit from resort amenities (e.g. Story Lake), or is it enough for it to have a private pool? Current prices and interest rates are squeezing margins, so I'm looking for ways to reduce expenses (e.g. HOA fees). Do you think a house would rent if it's not in a community?
With condos, we see the stronger performers at Vista Cay and Storey Lake. It's really about location, location location. Storey Lake is a newer community with great amenities closest to Disney, and Vista Cay is the closest to Universal AND next door to the Orange County Convention Center. That's not to say you can't have a condo with great decor somewhere else that will do very well - but in our experience these two a pretty reliable.
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Property Manager
- VillaKey, LLC
- http://myvillakey.com/owners
- [email protected]