Orlando -- A good price range to start for invest in rental properties

[Han Gu]

Hi all,

Looking to buy my first rental. Currently looking in Orlando area. I live in NY, so this will be remote. I did most of the research on Zillow, so the estimated rental numbers all come from zillow's estimate.

It seems, for properties up to $120k, one can get monthly rents of 1% of property price, so around $1200. Once you get over that $120k line, rents just don't increase proportionally to the price. A $150k property doesn't get rent of $1500, zillow estimates it to be around $1250.

For properties under $120k, rents seem to be more than that 1%.  So for $80k property, I've seen rents of $900.

Is this true in Orlando? Should $120k be where I draw the line in order to get the most bang for my buck? (in terms of rental)

Is there anywhere else in US that's a better place for rental?

All newbie questions. Thanks guys.

[Victor Menasce]

The Orlando market consists of several markets with different characteristics. In Orlando proper, you can only sign 12 month leases for residents. Short term leases attract hotel tax and the economics don't work. Seasonal and short term rentals are in neighboring communities like Kissimmee. But be aware that short term rentals have attractive rents during high season if marketed properly, and can experience periods of high vacancy during shoulder and low season months. Orlando is also a city where school districts matter a lot. Areas like Metro-West and Dr. Phillips have excellent schools and rental vacancy rates are near zero. Not true of other areas. Regardless of the city, real estate is intensely local. My business is headquartered in Chicago, and I live in Ottawa, Canada. I invest in several US markets. Strong local knowledge is critical to investing successfully, even doing it from afar.