Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
I wanted to take a minute to highlight some of the market data that we should all be watching in Orlando right now. According to a recent multi-family market report from Marcus & Millichap, rents in the Orlando Metro Area are up 5% over the last four quarters alone (with some submarkets reaching more than 8%). The area has added over 400,000 residents in the last five years and vacancy rates are at historic lows around 3%. Average rent in the metro area is now at $1,115 per month. Orlando is showing a 3.6% job growth rate year over year, which is double that of the national rate. According to Florida Realtors, the Orlando MSA has seen a 7.2% increase in single family home sales volume and a 9.3% increase in median sales price year over year.
My rental has been vacant for the last three months, so we have put it up for sale and have had very little interest. I think it's due to the size. It's a 4500 sq ft house that had been rented out for the last five years. The renter left and we can't go lower on the rent or we will not even break even with the mortgage and all the fees (landscaping, pest, property mgmt, etc.). We were considering rented it out via VRBO or AirBnB but that would require either furniture rental or a big furniture purchase, again killing any profits we could make. Also, since it's in Orange County, I've heard VRBO and AirBnB are not a good idea.
Ultimately, that may be the problem - sounds a little like you're basing your rental amount on how much your mortgage payment is. If thats the case, then I would suggest that may be the problem.
You need to check what other properties that size are renting for and set the rent to that. If your rent is comparable to those other properties, then you need to figure out what else may be wrong. Have you repainted? Floors decent? etc.
But it doesn't make sense to continue to eat vacancy instead of just lowering your price. If your rent is 2k, you've lost out on 6k to date. That means even if you get a renter to move in tomorrow, you're going to end up at only 18k for the year which is an effective rent amount of only $1500 a month.
Why not lower the rent to 1800/mo and get someone in there quicker?
It is a bit tricky to rent houses that big for sure as the tenant pool is going to be much smaller. But I would much rather lower the rent than sit on the house for months on end like that.