Narrowing down focus for 1st Rental - Orlando or Space Coast?

Question

My FIRST EVER BP forum post! So excited to be here! My husband and I live in the Melbourne, FL area (Space Coast Area), and are ready to purchase our first rental property (BRRRR strategy).  We've read the books, listened to the podcasts, done our research and are currently building relationships in our local area as well as Orlando.

My question/difficulty I'm having is: how do I (or do I need to?) narrow down my focus to a smaller area?  The more research I do on both Orlando AND the Space Coast, I just get more excited about both in terms of investment opportunity.  Do you recommend selecting 1 and going all in - or continuing to develop relationships in both and pursuing wherever we find a deal first?  Any insight would be so greatly appreciated and/or if there's any Floridian's that are seeing something I'm not in terms of Orlando vs Space Coast, I'm all ears! Thanks in advance!

Shawn McCormick · Answer

Hi @Maggie Lundstrom I live in Olrando and don't know too much about the Space Coast other than it is set to make a big comeback and values are rising quickly. One thing is knowing your comfort level of handing off your rental to a property manager. Do you plan to self manage if it is closer to your home? Either way you should include the cost (8-10%) in your evaluations of a property, because at some point, you will likely turn it over to one.  And if in Orlando, do you know what to look for in a PM? Self managing can be tricky if the tenant knows you are the owner and can take advantage of that and you'll be 'on call' all the time for repairs etc. ( I like to hold properties in a trust and to the tenant, I am just the property manager as the trust hides the owner info).

I would be happy to help in your search or provide insight into some areas of Orlando that are strong. Feel free to reach out anytime! Good Luck!

Shawn G. · Answer

@Maggie Lundstrom Welcome to BP. It is a great place to be. Glad to see you are seeking advice. Continue to network. Typically there are a ton of events going on all the time. Of course these days, they are mostly on Zoom :) For sure continue to grow your team. Investor friendly Realtors such as @Shawn McCormick are important to know.

I am happy to help in anyway I can. I live in Orlando, have family in Palm Bay and am closing on an investment property this week on Merritt Island. So I am all over the place lol.

I am happy to help in anyway I can.  I live in Orlando, have family in Palm Bay and am closing on an investment property this week on Merritt Island.  So I am all over the place lol.

Keith C. · Answer

Welcome @Maggie Lundstrom . It seems you narrowed down to markets  on your own. Many people don't even get that far.

They are both good markets.   I have lent on deals in both locals . If its your first deal stay closer to home ,, Easier to keep an eye on property . You will also likely have a little less competition near Melbourne. Orlando has been an investor target for years now. Most deals dont last and those that do you don't want.. Find something you like do the numbers. Insure you are over the 1% rule ,, than  make an offer subject to inspection .

It would be best to get Pre Qualified Loan letter from a mortgage company  ( here at your service :)  Your offer with a Pre Qualified Letter will carry more with with broker    & seller .   And you still will have the Due diligence period if you needed to lower offer and  or back out.   Good luck ,, I know some good brokers if you need one  ..

Ron H. · Answer

@Maggie Lundstrom .  I invest in both Orlando and Brevard.  I would love to invest more in SFH in the Melbourne area and try to keep my eyes open for off market properties there, but in terms of renting I receive many times higher response for my rental ads in Orlando vs Melbourne.  The market demand  for rental housing in Orlando is just much better than the Space coast.  The economy is much more diverse in Orlando also, barring further Covid issues.

Matt Leber · Answer

@Maggie Lundstrom I recommend setting up contact with an agent that operates in the greater Orlando area and with an agent in the Brevard County area. That way you can look at both. My wife and I live in Lake Nona area in Orlando but do most of our investing in Brevard because the rents are comparable but the prices tend to be a bit lower and you can get a nicer place for less money. We have picked up 3 SFH in Brevard since late 2016 (one each in Melbourne, West Melbourne, Port St John). All of them are well above the 1% rule and cash flow nicely.

Most investment criteria homes I see in Orlando are closer to 0.8-1% rule because the prices are a bit higher. Taxes may be a bit higher in Orlando proper which dampens cash flow a bit. That’s why I say look at “greater” Orlando. Think Kissimmee, Apopka, Deltona, Debary, even Polk County areas.

I end up watching several counties (Orange, Brevard, Volusia, Polk, Lake, Seminole, Osceola, Duval) for investment opportunities. I would love to buy another house in Orange County, but until I can buy there at a price I like, I will continue to buy in Brevard.

Kapil Nanda · Answer

Hi Maggie, having lived in Melbourne and now in Orlando I would strongly consider Orlando and surrounding Orlando areas. Orlando does have a lot of competition but still have deals to apply the BRRRR model.

If you were to consider Melbourne I really like the Viera area due to strong home values over the years.

I would recommend sticking to one area for the time being and building relationships with contractors and even banks. The relationships you build can be used in either markets.

Hope that helps,

Kapil

Maggie Lundstrom · Answer

Thanks All so much for your inputs! I’m taking it all into consideration. Looking forward to our new journey! And special thanks to the Orlando & Space Coast folks who chimed in - the main take away from all your responses is that BOTH areas are doing great. It’s a great place to both live and invest. Have a wonderful weekend!

Kerry Baird · Answer

The Space Coast has been a fine place to invest. The local Chamber of Commerce told us how the county diversified after the last bust and expanded local infrastructure. Port Canaveral, larger cruise ships (when that is viable again) and container ship offloading, strong medical, the various space programs, Boeing, Harris, and other aerospace industry. Also, the local airport worked a deal with the largest travel package company in the U.K. to bring flights to Orlando- Melbourne International Airport, which will bring many European visitors, and will impact the county.

Joseph Banaszek · Answer

great question. I have a house in rockledge and love the space coast. I hope to follow the same path

Narrowing down focus for 1st Rental - Orlando or Space Coast?

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