The amount of inventory hitting the Four Corners, Reunion, and ChampionsGate areas is incredible. I am seeing more properties come on the market every day, including a growing number of short sales. Some owners are selling at major losses on properties they purchased only a few years ago, and several of them are practically brand new.

If your goal is to increase your income and potentially benefit from additional tax deductions, now may be a good time to consider a short term rental in Orlando.

Some of the best performing Airbnbs in the 34747 ZIP code, where many communities allow short term rentals, can bring in more than $600 per night with occupancy rates around 60%. At that level, a property could generate roughly $130,000 in gross annual revenue and potentially come close to $100,000 after management and operating expenses, but before the mortgage, property taxes, insurance, and other ownership costs.

When some of these properties can be purchased for around $500,000, the potential return starts to look very attractive. DSCR loan rates are also around 6.5% in some cases, depending on the borrower, property, and lender.

Orlando continues to be one of the most visited destinations in the country. Even though the short term rental market has slowed from its peak, there is still plenty of room for future growth. Disney and Universal continue investing heavily in new attractions, park expansions, and updated experiences that should bring even more visitors to the area.

I visit the parks almost every week, and they are still busy, even on weekdays. Attendance may be slightly lower than it was at its peak, but the parks are far from empty. Once more of these new attractions are completed, I believe demand could become even stronger.

For a long time, I advised many clients to be cautious about Orlando’s short term rental market. Recently, however, prices have been dropping quickly, more motivated sellers are entering the market, and the number of short sale opportunities is growing. Because of that, I believe some of the best buying opportunities may still be ahead of us.

Of course, not every short term rental will be profitable. The purchase price, location, community restrictions, amenities, management, financing, and operating costs all matter. Every property needs to be evaluated carefully based on realistic numbers.