Kissimmee STR - How Many Bedrooms?

Question

Getting serious about finding an STR near Orlando.  Is there a sweet spot for the number of bedrooms we should be looking for?  AirDNA says there are 32K active rentals with an average of 5 bedrooms for 11 guests.  My question is: what's the most desirable (highest demand) number of bedrooms?  I've got to believe the rental pool is limited with too few or too many.  Is there a magic number?

Ryan Ridge · Answer

If you go this route, you'll need to differentiate yourself from others through different amenities or value-adds. There's tons of 3BR out there, but 8BR+ is the sweet spot since so many families travel together and go to the theme parks. Your decor and furniture package make all the difference as well since there's so many 3BR units. You'll still make money with the right PM.

Kelly French · Answer

It's really not with the right property manager!

Scott Seydor · Answer

@Kelly French @Carson McGee Very helpful, thanks!  8+ beds seems daunting.

Carson McGee · Answer

Hi Scott,

I own and manage short-term rentals in the Kissimmee/Davenport area. I would say that there is absolutely a sweet spot, the market has an abundance of 3-5 bedroom homes. Even with top-tier theming and design, it can be tough to stick out from the competition at this level. All of the homes that my company owns are 8 bedrooms or larger. This is just the specific niche that my team has found to generate the best return on investment. This varies based on your specific goals. The larger the home, the higher the purchase price, cost to furnish/theme/design, etc. The larger homes have less rental competition than the average home and can yield a much higher rent premium in peak season. This is mostly due to our homes comfortably sleeping 15-20 people and being able to target multigenerational groups who can split the rent. The larger homes can be more difficult to manage, with all that square footage, there are more amenities and general upkeep needed. Ultimately, it is up to your personal goals and what you desire to achieve. Despite all the competition, you can be successful at any level if you run the numbers and put effort into the design. If you would like some real data on how annual revenue fluctuates in these different communities feel free to reach out!

Kelly French · Answer

Hi Scott! If you're looking in the Disney area- 4-6 bedrooms are saturated. Most owners end up cutting their ADR to compete for heads in beds. When you hit the 8-15 bedrooms, competition significantly decreases. You can have a bit less occupancy, but much higher ADR. A big factor depends on your price. As I work with investors, I take a look at their price point, then maximize the highest bedroom count in the neighborhood that has the highest rental rates. Hopefully this helps!

Dalton King · Answer

3 bedroom I would say is most common and best bang for the buck.