New to Real Estate · Seattle · Member since 2019 · 11 posts · 3 votes
Hello,
I have started looking for some STR properties in Oralando specifically the Kissimmee area. I'm working with the Short term shop agent and so far like it. I have a couple of questions for folks who have already invested in STR in Orlando.
1. How easy is it to manage STR remotely? Property management company charges 20-25% which I think will eat my profit. Managing by myself could be challenging but if someone has done it, I would love to connect and know the challenges.
2. When you bought an STR was it already furnished? A lot of deals that I see are already furnished.
3. If the previous owner has listed the STR on Airbnb, did you get to keep the reviews and listing as it or would you need to start again from scratch?
4. If my STR strategy does not work for some reason, possible to rent it long-term? I'm not sure about the long-term cash flow in the resort community in Orlando.
5. Is Kissimmee already very saturated or still hot? I can research other areas as well where there is less competition and still decent demand. I live in Seattle so it doesn't matter to me if it's Orlando or Miami. All I'm looking for is the numbers that make sense.
My budget is around 450k. For Orlando STR people say the bigger the better so would look for 4+ bedrooms.
I have started looking for some STR properties in Oralando specifically the Kissimmee area. I'm working with the Short term shop agent and so far like it. I have a couple of questions for folks who have already invested in STR in Orlando.
1. How easy is it to manage STR remotely? Property management company charges 20-25% which I think will eat my profit. Managing by myself could be challenging but if someone has done it, I would love to connect and know the challenges.
2. When you bought an STR was it already furnished? A lot of deals that I see are already furnished.
3. If the previous owner has listed the STR on Airbnb, did you get to keep the reviews and listing as it or would you need to start again from scratch?
4. If my STR strategy does not work for some reason, possible to rent it long-term? I'm not sure about the long-term cash flow in the resort community in Orlando.
5. Is Kissimmee already very saturated or still hot? I can research other areas as well where there is less competition and still decent demand. I live in Seattle so it doesn't matter to me if it's Orlando or Miami. All I'm looking for is the numbers that make sense.
My budget is around 450k. For Orlando STR people say the bigger the better so would look for 4+ bedrooms.
Thanks,
Rachit
1) Orlando is very easy. Huge city with lots of STR (well, Davenport/Kissimmee of course, but people call it "Orlando"). Plenty of PMs more in the 15% range here with all the competition, but if you want to self-manage Orlando is as easy at it gets as there will be a zillion cleaners, handymen, etc to choose from, plenty of big box stores, instacart, same day amazon delivery, etc. Essentially, it's tier 1 in terms of STR infrastructure.
2) Yes, and strongly recommended. In Orlando, you want to spend your money on theming, not furnishing. You can spend $60k on furnishing to make your place look like all the 40,000 other rentals, or you can spend $60k on theming to make it stand out and be one of the top 1,000. The latter is not only the obvious choice, it's the necessary choice if you're working with a budget.
3) No. You start over.
4) In Orlando area you're most likely looking at the gated resort communities built specifically for STR. You won't even come close to covering the mortgage as a LTR. People that say you should make sure your property can work as a LTR too are talking about regular cities that aren't tourist destinations. Like in Akron OH you could probably buy a place that will work as a LTR if STR doesn't work out. But in tourist destinations like Orlando, Gatlinburg, Destin, etc it's not realistic. LTR rates in those areas won't even come close to what you need to cover the expensive mortgages that are driven by STR revenue.
5) Both, maybe? Everywhere is saturated now. The difference with the Disney area is that there have always been lots of rentals, so it's a different kind of saturation. In rural Southern Utah "saturation" means that there are 400 rentals now in a city that had 30 rentals 3 years ago. In Disney it's not that there are more rentals, it's just that there are more GREAT rentals, which means you have to really stand out, and when you do stand out you're still going to have more competition. That is, there are maybe 40,000 rentals now whereas there were 37,000 3 years ago, which is a negligible difference. But the major difference is that there may be 2,000 nicely themed properties now where as 3 years ago there were 100 of those.
450k purchase price or cash? 450k isn't really going to get one of the "big" places in Orlando if you're talking purchase price. "Big" in Orlando is 9+ bedrooms and unlike other markets, there are tons of them even in that size. That's not to say you can't do well with a 4-5 bedroom place, but just clarifying that's not what people mean when they say "big" in this market.
I'm not affiliated with STS but I know the STS realtor in this market and you're in very good hands.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
1. We all do it just jump in :) it’s not easy or passive but can be fun.
2. Most will come finished in your market. That said it’s a used couch.
3. You don’t keep the reviews and you don’t want the bookings better to start from scratch.
4. A good vacation market will not make sense as a long term. I’d forget about this part.
5. Saturated is a buzz word. Orlando has always had a ton of rentals. You just have to be better than the rest. 450k will probably be a bit out of reach for a large home.
I have started looking for some STR properties in Oralando specifically the Kissimmee area. I'm working with the Short term shop agent and so far like it. I have a couple of questions for folks who have already invested in STR in Orlando.
1. How easy is it to manage STR remotely? Property management company charges 20-25% which I think will eat my profit. Managing by myself could be challenging but if someone has done it, I would love to connect and know the challenges.
2. When you bought an STR was it already furnished? A lot of deals that I see are already furnished.
3. If the previous owner has listed the STR on Airbnb, did you get to keep the reviews and listing as it or would you need to start again from scratch?
4. If my STR strategy does not work for some reason, possible to rent it long-term? I'm not sure about the long-term cash flow in the resort community in Orlando.
5. Is Kissimmee already very saturated or still hot? I can research other areas as well where there is less competition and still decent demand. I live in Seattle so it doesn't matter to me if it's Orlando or Miami. All I'm looking for is the numbers that make sense.
My budget is around 450k. For Orlando STR people say the bigger the better so would look for 4+ bedrooms.
Thanks,
Rachit
1) Orlando is very easy. Huge city with lots of STR (well, Davenport/Kissimmee of course, but people call it "Orlando"). Plenty of PMs more in the 15% range here with all the competition, but if you want to self-manage Orlando is as easy at it gets as there will be a zillion cleaners, handymen, etc to choose from, plenty of big box stores, instacart, same day amazon delivery, etc. Essentially, it's tier 1 in terms of STR infrastructure.
2) Yes, and strongly recommended. In Orlando, you want to spend your money on theming, not furnishing. You can spend $60k on furnishing to make your place look like all the 40,000 other rentals, or you can spend $60k on theming to make it stand out and be one of the top 1,000. The latter is not only the obvious choice, it's the necessary choice if you're working with a budget.
3) No. You start over.
4) In Orlando area you're most likely looking at the gated resort communities built specifically for STR. You won't even come close to covering the mortgage as a LTR. People that say you should make sure your property can work as a LTR too are talking about regular cities that aren't tourist destinations. Like in Akron OH you could probably buy a place that will work as a LTR if STR doesn't work out. But in tourist destinations like Orlando, Gatlinburg, Destin, etc it's not realistic. LTR rates in those areas won't even come close to what you need to cover the expensive mortgages that are driven by STR revenue.
5) Both, maybe? Everywhere is saturated now. The difference with the Disney area is that there have always been lots of rentals, so it's a different kind of saturation. In rural Southern Utah "saturation" means that there are 400 rentals now in a city that had 30 rentals 3 years ago. In Disney it's not that there are more rentals, it's just that there are more GREAT rentals, which means you have to really stand out, and when you do stand out you're still going to have more competition. That is, there are maybe 40,000 rentals now whereas there were 37,000 3 years ago, which is a negligible difference. But the major difference is that there may be 2,000 nicely themed properties now where as 3 years ago there were 100 of those.
450k purchase price or cash? 450k isn't really going to get one of the "big" places in Orlando if you're talking purchase price. "Big" in Orlando is 9+ bedrooms and unlike other markets, there are tons of them even in that size. That's not to say you can't do well with a 4-5 bedroom place, but just clarifying that's not what people mean when they say "big" in this market.
I'm not affiliated with STS but I know the STS realtor in this market and you're in very good hands.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Good advice here @Rachit Puri. I can't see you doing well with 450k IMHO. We looked 2 years ago and everything in that budget range was not able to perform, even with us managing it ourselves.
The ones that seem to do really well is in the 1m plus range. Like @Ryan Moyer pointed out, the 9+ bedroom themed places do very well, but the buy in is high.
Homeowner · Celebration, FL · Member since 2023 · 37 posts · 14 votes
3y
Hi - we own STR, list and manage a number of priorities in ‘Orlando'.
Depending on your revenue forecast, our property management business model, would save thousands compared to the traditional commission fee model.
There were plenty of LTR happening in the STR resort communities here during Covid, not so much now. A lot of your questions you'll find the answers to, by knowing the competition, or finding a really good local agent.
For example, STR are zoned in orlando, so having a LTR in a zoned STR areas would not make you competitive on monthly rates compared to a non STR zoned home. The HOA's are huge here in STR zoned areas.
Saturated? For townhouses and condos, yes. Unfortunately, for your budget a 4 bedroom home will likely get you a townhouse or condo (I could be wrong).
Bedroom demand for each STR resort is different, and global demand has always been there for Orlando/Kissimmee/Davenport, given Disney World/Universal. I therefore don’t think it is saturated, you just been to weigh up how big demand is for what you are specifically offering. Supply for a 3/4 bedroom in the area is very high, which will limit your passive revenue, and have you competing with condo prices. As condos compete with hotel prices, this will mean your daily rate will end up being a great deal for guest, and not so much for the homeowner.
If you can stretch your budget to get a 5+ single family home (some nice ones at Windsor island), or create a killer themed townhouse, you could get closer to $75k+ in annual revenue. For a 4 bedroom you’ll struggle to hit $45K+ annual revenue.
All the best, let me know if I can help further….Andy
1. We all do it just jump in :) it’s not easy or passive but can be fun.
2. Most will come finished in your market. That said it’s a used couch.
3. You don’t keep the reviews and you don’t want the bookings better to start from scratch.
4. A good vacation market will not make sense as a long term. I’d forget about this part.
5. Saturated is a buzz word. Orlando has always had a ton of rentals. You just have to be better than the rest. 450k will probably be a bit out of reach for a large home.
Hope this helped!
Thanks, Luke for the short and clear answers! The BP community is so helpful :)
Good advice here @Rachit Puri. I can't see you doing well with 450k IMHO. We looked 2 years ago and everything in that budget range was not able to perform, even with us managing it ourselves.
The ones that seem to do really well is in the 1m plus range. Like @Ryan Moyer pointed out, the 9+ bedroom themed places do very well, but the buy in is high.
Thanks, Michael for sharing your experience. I know the realtor will say that it's doable with 450k in Orlando but I have to be very creative with the listing. If STR is not giving me enough return considering the extra hours I have to put then wondering if it's worth investing. Maybe I find a partner and then invest in a bigger home.
I want to hear more stories like yours from other investors in Orlando with a 450k budget for me to take a call.
New to Real Estate · Seattle · Member since 2019 · 11 posts · 3 votes
3y
Quote from @Account Closed:
Hi - we own STR, list and manage a number of priorities in ‘Orlando'.
Depending on your revenue forecast, our property management business model, would save thousands compared to the traditional commission fee model.
There were plenty of LTR happening in the STR resort communities here during Covid, not so much now. A lot of your questions you'll find the answers to, by knowing the competition, or finding a really good local agent.
For example, STR are zoned in orlando, so having a LTR in a zoned STR areas would not make you competitive on monthly rates compared to a non STR zoned home. The HOA's are huge here in STR zoned areas.
Saturated? For townhouses and condos, yes. Unfortunately, for your budget a 4 bedroom home will likely get you a townhouse or condo (I could be wrong).
Bedroom demand for each STR resort is different, and global demand has always been there for Orlando/Kissimmee/Davenport, given Disney World/Universal. I therefore don’t think it is saturated, you just been to weigh up how big demand is for what you are specifically offering. Supply for a 3/4 bedroom in the area is very high, which will limit your passive revenue, and have you competing with condo prices. As condos compete with hotel prices, this will mean your daily rate will end up being a great deal for guest, and not so much for the homeowner.
If you can stretch your budget to get a 5+ single family home (some nice ones at Windsor island), or create a killer themed townhouse, you could get closer to $75k+ in annual revenue. For a 4 bedroom you’ll struggle to hit $45K+ annual revenue.
All the best, let me know if I can help further….Andy
Thanks, Andrew for your valuable feedback. I feel like I'm learning a lot from this BP community. I think I might need to buy AirDNA to do my research on what works and what does not.
Good advice here @Rachit Puri. I can't see you doing well with 450k IMHO. We looked 2 years ago and everything in that budget range was not able to perform, even with us managing it ourselves.
The ones that seem to do really well is in the 1m plus range. Like @Ryan Moyer pointed out, the 9+ bedroom themed places do very well, but the buy in is high.
Thanks, Michael for sharing your experience. I know the realtor will say that it's doable with 450k in Orlando but I have to be very creative with the listing. If STR is not giving me enough return considering the extra hours I have to put then wondering if it's worth investing. Maybe I find a partner and then invest in a bigger home.
I want to hear more stories like yours from other investors in Orlando with a 450k budget for me to take a call.
I am in Orlando and work with a lot of STR investors on the financing side of things. You want to buy a larger luxury asset if you want to compete in the Kissimmee area by Disney, in my opinion. I have a client that owns and manages roughly 35 units in Encore, but all those are a minimum of $700k. If you can get over 8 bedrooms (ideally 10), you are much better off. I'd consider buying something less expensive, but seperate yourself by theming it amazingly. Feel free to reach out if you need advice.
I have started looking for some STR properties in Oralando specifically the Kissimmee area. I'm working with the Short term shop agent and so far like it. I have a couple of questions for folks who have already invested in STR in Orlando.
1. How easy is it to manage STR remotely? Property management company charges 20-25% which I think will eat my profit. Managing by myself could be challenging but if someone has done it, I would love to connect and know the challenges.
2. When you bought an STR was it already furnished? A lot of deals that I see are already furnished.
3. If the previous owner has listed the STR on Airbnb, did you get to keep the reviews and listing as it or would you need to start again from scratch?
4. If my STR strategy does not work for some reason, possible to rent it long-term? I'm not sure about the long-term cash flow in the resort community in Orlando.
5. Is Kissimmee already very saturated or still hot? I can research other areas as well where there is less competition and still decent demand. I live in Seattle so it doesn't matter to me if it's Orlando or Miami. All I'm looking for is the numbers that make sense.
My budget is around 450k. For Orlando STR people say the bigger the better so would look for 4+ bedrooms.
Thanks,
Rachit
1) Orlando is very easy. Huge city with lots of STR (well, Davenport/Kissimmee of course, but people call it "Orlando"). Plenty of PMs more in the 15% range here with all the competition, but if you want to self-manage Orlando is as easy at it gets as there will be a zillion cleaners, handymen, etc to choose from, plenty of big box stores, instacart, same day amazon delivery, etc. Essentially, it's tier 1 in terms of STR infrastructure.
2) Yes, and strongly recommended. In Orlando, you want to spend your money on theming, not furnishing. You can spend $60k on furnishing to make your place look like all the 40,000 other rentals, or you can spend $60k on theming to make it stand out and be one of the top 1,000. The latter is not only the obvious choice, it's the necessary choice if you're working with a budget.
3) No. You start over.
4) In Orlando area you're most likely looking at the gated resort communities built specifically for STR. You won't even come close to covering the mortgage as a LTR. People that say you should make sure your property can work as a LTR too are talking about regular cities that aren't tourist destinations. Like in Akron OH you could probably buy a place that will work as a LTR if STR doesn't work out. But in tourist destinations like Orlando, Gatlinburg, Destin, etc it's not realistic. LTR rates in those areas won't even come close to what you need to cover the expensive mortgages that are driven by STR revenue.
5) Both, maybe? Everywhere is saturated now. The difference with the Disney area is that there have always been lots of rentals, so it's a different kind of saturation. In rural Southern Utah "saturation" means that there are 400 rentals now in a city that had 30 rentals 3 years ago. In Disney it's not that there are more rentals, it's just that there are more GREAT rentals, which means you have to really stand out, and when you do stand out you're still going to have more competition. That is, there are maybe 40,000 rentals now whereas there were 37,000 3 years ago, which is a negligible difference. But the major difference is that there may be 2,000 nicely themed properties now where as 3 years ago there were 100 of those.
450k purchase price or cash? 450k isn't really going to get one of the "big" places in Orlando if you're talking purchase price. "Big" in Orlando is 9+ bedrooms and unlike other markets, there are tons of them even in that size. That's not to say you can't do well with a 4-5 bedroom place, but just clarifying that's not what people mean when they say "big" in this market.
I'm not affiliated with STS but I know the STS realtor in this market and you're in very good hands.
Wow, so much great information. Thank you so much Ryan for such a detailed response.
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y
In terms of #5 - if the market is saturated, it's "saturated" for a reason. As long as you are able to separate yourself in some way shape or form from the competition, there should be enough of a market share/enough meat on the bone, for your property to obtain bookings.
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
I agree with most here, if you can be unique or separate yourself in some way you will do fine. Make everything nice and price yourself according to your competition. Gone are the days where you could throw cheap furniture and in an outdated house and make money.
Any reason why you chose Orlando? I would recommend looking in other markets in FL too, particularly Tampa!
Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes
3y
Rachit, we can help. We use Key Data Dashboard to analyze specific properties so you can compare. Way more precise than Airdna since it pulls from actual booking data. Also, happy to brainstorm the areas in the market where you will find pockets of opportunity at your price range. Feel free to reach out!
Investor · Orlando, FL · Member since 2021 · 57 posts · 22 votes
3y
Has anyone operationalized the word saturated? Is there a metric that investors are already using for this supply/demand oriented concept?
When someone says there are no deals, for example, we at least all have rules of thumb in mind regarding cap rates or cash on cash return etc. Yet I keep noticing a bit of squabbling over the ‘saturation’ word without any numbers to help us think more clearly about the real question at hand.
While I love ambiguity in my art and I recognize some of REI is an art-form rather than a science, I am also always looking for ways to increase accuracy in my analyses.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
I think the saturation word is used too much. Supply is outpacing the demand.
Some folks will look at the raw numbers of STRs and say that is saturated even though good STRs are still booking well.
A place that has a lot of draw will continue to have that draw so buying a place there isn't necessarily a bad idea. If you set it up well, priced right with great photos, people will want to stay there instead of the grandma furniture place down the road.
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
3y
I have an STR in Four Corners that kind of mimics what you're looking for - it's a 4/3 3k SF on a small lake. It doesn't pay for itself but I use it myself part of the year so I didn't really expect that it would; the rent just helps offset some of the costs of owning it. I more or less self-manage - I have a local PM that more or less just oversees the cleaners and takes care of emergencies - so doing that part of it yourself is not hard but will consume some time. I'm retired so I have the time; if you have a job you might not want to be bothered.
The problem with what you want to do is that the prices are all over the place on that kind of unit and there's thousands of owners looking to rent their heavily used dumps for $100/night. A lot of people - a whole lot - that come to this are are price conscious, especially since they tend to spend most of the day gone at the parks and don't really use the home much other than eating breakfast and sleeping (at least my guests). So even though I have a nicer property than most I'm still competing with people who don't care to charge less than what a budget motel costs. This is why you'll see a lot of advice to theme and to buy bigger places, because your competition with 5/6/7+ bedroom places is much smaller and entry price points are much higher than in 3/4s like what I own. For my purposes, I use it for family get-togethers too so what I have works for my situation. As a pure investment it would have never made sense.
Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
3y
@Rachit Puri, you are correct, managing remotely is a little challenging but doable. You have many options and different apps if you have the right systems in place.
You have a ton of options of cleaners, handyman, ....
Realtor · Orlando · Member since 2019 · 18 posts · 10 votes
1mo
Hi Rachit,
I've been involved in the Orlando/Kissimmee STR market for quite a while, both as an investor and as a Realtor. I'm a top-producing agent specializing in vacation rental/STR properties, personally own 10+ vacation homes, and my STR management company manages 100+ properties in the Central Florida market.
A few thoughts based on my experience:
1. Managing remotely: It’s definitely possible, but I wouldn’t underestimate the operational side. Guest communication is probably the easiest part to outsource. Cleaning, maintenance, inspections, pool service, landscaping, and handling issues at the property are where things can get complicated. If you live in Seattle, I’d strongly consider having a reliable local management/operations team unless you have a very good local vendor network.
Also, 20–25% is on the higher side in my experience. There are management options at lower percentages, but you need to look closely at exactly what is included.
2. Furnished vs. unfurnished: A lot of Orlando vacation homes are sold fully furnished. That can be a major advantage because furnishing a 4–6 bedroom vacation home can get expensive. Just make sure you actually value the furniture and inspect its condition rather than automatically paying a premium for it.
3. Airbnb reviews/listing: I would not assume that you automatically get to keep the previous owner's Airbnb listing, reviews, or account history. Airbnb accounts and listings have specific policies around transfers, so this is something I would verify before making an offer. I would underwrite the property assuming you may have to build your own listing history rather than relying on the seller's reviews.
4. Long-term rental backup: This is one of the things I would analyze before buying. Some resort communities are much better suited to vacation rentals than traditional long-term rentals, and HOA/association rules can also matter. I would look at the long-term rental comps and expenses as a backup strategy, but I wouldn't assume the property will automatically cash flow as a long-term rental.
5. Is Kissimmee saturated? There are definitely a lot of STRs in the Kissimmee/Disney-area market, but I wouldn't look at saturation by itself. The bigger question is whether the specific property, location, bedroom count, amenities, resort, and purchase price produce numbers that work.
With a ~$450K budget and a preference for 4+ bedrooms, I'd pay particular attention to the communities around the major tourism corridors and compare actual performance rather than simply looking for the area with the fewest Airbnb listings.
One thing I always tell investors: don't buy based on the seller's projected Airbnb revenue. Look at actual historical performance where available, realistic occupancy, ADR, management, HOA, taxes, insurance, utilities, maintenance, reserves, and financing. Then stress-test the numbers.
Orlando can still be a very interesting STR market, but the deal has to make sense at the property level. There are good buys and bad buys within the same resort community.
