STR Recommendations for max profit ~$300K, Disney area

Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes

2y

@David Sanders you've got several things to unpack here. First off, IMO, the houses in your price range will not cash flow enough to cover all you expenses and mortgage. This market has over 40,000 units on STR programs, there is no room to be average or ordinary.

A very basic breakdown of your costs

$300k purchase price minus 20% down= $240,000 @ 8% interest, you are at $1700=/- month

$1700 minus taxes (200) Insurance (200), utilities ($600), HOA (200?)=$500 per month

$500 minus PM fee of 20% on $3,000 leaves you with negative cash flow already.

To address your other questions

1. condo vs SFR. Condos are always difficult to cash flow especially with higher HOA costs (your est of 700-1000 a month is not accurate, that is over the top). Single-family better have a pool or don't bother

2.avoid Ponciana, it is way too far from the parks and it is just not the type of area that you would likely want to vacation and the same would go for your guests. Location is vital for almost any STR. Whether its a mountain view, ocean view, roof top overlooking big city or being close to the theme parks, location matters.

Hope this helps, best of luck.

1 Reply

David Sanders

OP

Member since 2023 · 9 posts · 5 votes

2y

That helps a lot, thanks for taking the time to respond. What property type/price range do you see as the most likely to cash flow?

Mortgage interest rates right now definitely make it more difficult to make money, I realize I'm likely competing with people who are paying cash.

If I could get a cheap property that was pretty break even in terms of cash flow when considering ALL expenses, as long as it was cheap enough I'd be happy with that. I just don't want an investment property that is going to be a financial "burden" with unrealized income. I would think long term it would pay off, maybe with a refinance several years down the road when interest rates drop, or when I sell the property if prices keep going up.

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Shawn McCormickPro Member

Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes

2y

Quote from @David Sanders:

That helps a lot, thanks for taking the time to respond. What property type/price range do you see as the most likely to cash flow?

Mortgage interest rates right now definitely make it more difficult to make money, I realize I'm likely competing with people who are paying cash.

If I could get a cheap property that was pretty break even in terms of cash flow when considering ALL expenses, as long as it was cheap enough I'd be happy with that. I just don't want an investment property that is going to be a financial "burden" with unrealized income. I would think long term it would pay off, maybe with a refinance several years down the road when interest rates drop, or when I sell the property if prices keep going up.

I would work closely with your agent and if you've identified a PM already, have them suggest communities that they feel offer the best opportunity for you. I am a proponent of buying in a well known community within the STR market here that is 'built' to be a STR that fits in the algorithms, has great amenties and is as close to Disney as you can afford.

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John Landskroener

Orlando · Member since 2023 · 61 posts · 13 votes

2y

check out some of the STR only communities in Davenport. Regal Palms, Bahama Bay, etc. In some of the communities with higher HOA they include things like cable, internet, unitilities, etc that you would end up paying for any way. In Davenport you can find some townhomes for under $300k. Do your average night rent and occupancy % to make sure you are getting a profitable property.

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Ryan MoyerBusiness Member

Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes

2y

I agree with Shawn. I manage a handful in the area and at current prices/rates I would not expect to cash flow most months, even with extra marketing, especially if you're paying a manager. If you want feel free to PM me and I can give you some numbers on how the homes we manage have been performing over the last few months/year and you can plug it in to see how it would work with your underwriting.

To cash flow right now in this market you really need to be theming, imo. And even then returns can still be tight depending on how good the theming is.

The instant fast cash flow was fun while it lasted, but we're moving into a more typical real estate cycle right now in this market where success is going to be determined by those with patience, looking at it as more of a long-term investment (as real estate has historically been).

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2 Reply

Travis Rasmussen

Realtor · Murrieta, CA · Member since 2016 · 373 posts · 203 votes

2y

Quote from @David Sanders:

I'm out of state, and largely unfamiliar with the disney area other than my family vacations and limited research. I'm looking to buy a family vacation property, but also make money on it. I've seen similar posts in the past, but they seem to all be around 2 years ago when the market was very different. I'm looking for a 3-4 BR property in the $300K range, maybe up to $350K. This will be a long term investment, so I'm looking for the best return long term, while hopefully generating enough cash flow to more than cover all related expenses and mortgage (figure 20% down). Couple specific questions:

1) condo/townhouse with HOA vs SFH with pool and no HOA? There's a lot of competition for both, so we would likely theme it and modernize it. But is one more profitable than the other? I see quite a few HOA fees in the $700-$1K/month range.

2) Any specific area recommendations? I see some nice houses with pools in my price range in the Poinciana area, but also seen some comments that this is a sketchy area? I would like to narrow my search down to a couple areas then visit these places in person. Other than General proximity to the theme parks, I'm not sure how much a specific location matters for prospective STR's?

I will be using a management company to handle everything (18-20% fee, correct?). The basic stats I got from my Realtor were STR's in the area for what I'm looking for typically generate about 65% occupancy (as a yearly average) and daily rates vary between $140-$180/night. Which works out to roughly $3K per month. Does that sound about right?

Also, don't go far from the parks. Davenport is too far. I would STRONGLY recommend getting as close as you can vs. Size of house or a "deal".

Been in that area for over 5 years now.

1 Reply

John Landskroener

Orlando · Member since 2023 · 61 posts · 13 votes

2y

Quote from @Travis Rasmussen:

Quote from @David Sanders:

I'm out of state, and largely unfamiliar with the disney area other than my family vacations and limited research. I'm looking to buy a family vacation property, but also make money on it. I've seen similar posts in the past, but they seem to all be around 2 years ago when the market was very different. I'm looking for a 3-4 BR property in the $300K range, maybe up to $350K. This will be a long term investment, so I'm looking for the best return long term, while hopefully generating enough cash flow to more than cover all related expenses and mortgage (figure 20% down). Couple specific questions:

1) condo/townhouse with HOA vs SFH with pool and no HOA? There's a lot of competition for both, so we would likely theme it and modernize it. But is one more profitable than the other? I see quite a few HOA fees in the $700-$1K/month range.

2) Any specific area recommendations? I see some nice houses with pools in my price range in the Poinciana area, but also seen some comments that this is a sketchy area? I would like to narrow my search down to a couple areas then visit these places in person. Other than General proximity to the theme parks, I'm not sure how much a specific location matters for prospective STR's?

I will be using a management company to handle everything (18-20% fee, correct?). The basic stats I got from my Realtor were STR's in the area for what I'm looking for typically generate about 65% occupancy (as a yearly average) and daily rates vary between $140-$180/night. Which works out to roughly $3K per month. Does that sound about right?

Also, don't go far from the parks. Davenport is too far. I would STRONGLY recommend getting as close as you can vs. Size of house or a "deal".

Been in that area for over 5 years now.

I don't know where you live but Davenport is the right in the ideal rental area of Disney. 4 corners is the best spot to find profitable vacation rentals. Davenport, Kissimmee, Clermont, and Championsgate are the best spots to make money on str.

0 Reply

Alice Horn

Property Manager · Kissimmee, FL · Member since 2019 · 445 posts · 266 votes

2y

Quote from @Ryan Moyer:

I agree with Shawn. I manage a handful in the area and at current prices/rates I would not expect to cash flow most months, even with extra marketing, especially if you're paying a manager. If you want feel free to PM me and I can give you some numbers on how the homes we manage have been performing over the last few months/year and you can plug it in to see how it would work with your underwriting.

To cash flow right now in this market you really need to be theming, imo. And even then returns can still be tight depending on how good the theming is.

The instant fast cash flow was fun while it lasted, but we're moving into a more typical real estate cycle right now in this market where success is going to be determined by those with patience, looking at it as more of a long-term investment (as real estate has historically been).

Agree with Shawn and Ryan. We frequently get requests in the $300k range and it’s a bit more challenging. As Ryan said, theming is key. The larger homes do all the theming, but we don’t see it as much in the smaller units. That’s a huge opportunity to set your place apart. Happy to brainstorm some possible communities and creative suggestions for today’s market.

Alice

0 Reply

Edward P.

Contractor · 32771 · Member since 2022 · 49 posts · 16 votes

2y

Location is huge! Closer to the parks the better.

1 Reply

Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

2y

Quote from @David Sanders:

I'm out of state, and largely unfamiliar with the disney area other than my family vacations and limited research. I'm looking to buy a family vacation property, but also make money on it. I've seen similar posts in the past, but they seem to all be around 2 years ago when the market was very different. I'm looking for a 3-4 BR property in the $300K range, maybe up to $350K. This will be a long term investment, so I'm looking for the best return long term, while hopefully generating enough cash flow to more than cover all related expenses and mortgage (figure 20% down). Couple specific questions:

1) condo/townhouse with HOA vs SFH with pool and no HOA? There's a lot of competition for both, so we would likely theme it and modernize it. But is one more profitable than the other? I see quite a few HOA fees in the $700-$1K/month range.

2) Any specific area recommendations? I see some nice houses with pools in my price range in the Poinciana area, but also seen some comments that this is a sketchy area? I would like to narrow my search down to a couple areas then visit these places in person. Other than General proximity to the theme parks, I'm not sure how much a specific location matters for prospective STR's?

I will be using a management company to handle everything (18-20% fee, correct?). The basic stats I got from my Realtor were STR's in the area for what I'm looking for typically generate about 65% occupancy (as a yearly average) and daily rates vary between $140-$180/night. Which works out to roughly $3K per month. Does that sound about right?

What you really really need to gather intel is to find out the top 20% host in your target area and analyze their booking. This are has been full of investor since 2009 even. Check actual supply and demand , STR regulation before making the decision. Nobody would care about your number after post sales are completed except yourself.

0 Reply

Travis Rasmussen

Realtor · Murrieta, CA · Member since 2016 · 373 posts · 203 votes

2y

Quote from @Edward P.:

Location is huge! Closer to the parks the better.

This guy has the right idea

0 Reply

John Landskroener

Orlando · Member since 2023 · 61 posts · 13 votes

2y

Quote from @Edward P.:

Location is huge! Closer to the parks the better.

right but do the prices and the amount per night equal out to a good investment or not?

0 Reply

David Sanders

OP

Member since 2023 · 9 posts · 5 votes

2y

Quote from @John Landskroener:

Quote from @Edward P.:

Location is huge! Closer to the parks the better.

right but do the prices and the amount per night equal out to a good investment or not?

You hit the nail on the head as far as what I'm going through right now. A break even cash flow seems to be a pretty optimistic outlook. I will say though, almost every property I look at has either sat for a long time, or has dropped their asking price. Market definitely seems to be cooling down in the area. I'm just going to keep an eye out for a good deal somewhere. I'd like to theme/update the property anyway, so if I can find one that's been neglected and simply needs updating, I'd be all over that.

0 Reply

John Landskroener

Orlando · Member since 2023 · 61 posts · 13 votes

2y

Quote from @David Sanders:

Quote from @John Landskroener:

Quote from @Edward P.:

Location is huge! Closer to the parks the better.

right but do the prices and the amount per night equal out to a good investment or not?

You hit the nail on the head as far as what I'm going through right now. A break even cash flow seems to be a pretty optimistic outlook. I will say though, almost every property I look at has either sat for a long time, or has dropped their asking price. Market definitely seems to be cooling down in the area. I'm just going to keep an eye out for a good deal somewhere. I'd like to theme/update the property anyway, so if I can find one that's been neglected and simply needs updating, I'd be all over that.

i'd look for a flip and hold property. Most of your str are turning into LTR because attenandance in the parks is down significantly, like 20%+. Right now with interest rates and prices most houses are negative cash flows unless they're flip and holds.

0 Reply

Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

2y

Quote from @John Landskroener:

Quote from @David Sanders:

Quote from @John Landskroener:

Quote from @Edward P.:

Location is huge! Closer to the parks the better.

right but do the prices and the amount per night equal out to a good investment or not?

You hit the nail on the head as far as what I'm going through right now. A break even cash flow seems to be a pretty optimistic outlook. I will say though, almost every property I look at has either sat for a long time, or has dropped their asking price. Market definitely seems to be cooling down in the area. I'm just going to keep an eye out for a good deal somewhere. I'd like to theme/update the property anyway, so if I can find one that's been neglected and simply needs updating, I'd be all over that.

i'd look for a flip and hold property. Most of your str are turning into LTR because attenandance in the parks is down significantly, like 20%+. Right now with interest rates and prices most houses are negative cash flows unless they're flip and holds.

Disney stock is going all time low that they are now even allowing homeless to stay inside ?

Be careful when you invest into an area that depends only on certain one large commercial business.

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STR Recommendations for max profit ~$300K, Disney area

STR Recommendations for max profit ~$300K, Disney area

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