Central Florida/Kissimmee STR advice?

Question

My husband and I are looking into financing a STR in the Kissimmee area (3/3 TH in Windsor Hills). We are only in the research process due to Covid and the inability to calculate some accurate numbers for $/night and occupancy rates for the area.

I have a general idea, but would love to get some feedback on personal experiences with occupancy rates pre-Covid. Our plan is to purchase a TH in need of updating and rehabbing with family-focused/themed decorating and amenities in mind and self-manage as much as possible as we have immediate family in the area willing to help out.

Those with STR's...how have your occupancy rates been since Covid started? Is there any buzz in the area as to when people expect to see occupancy rates increase? Is there an expectation that owners will start selling units due to this?

Any and all advice is welcome!!!

Serena Kim · Answer

@Jaclyn LignosI'm finishing a blog post on this same topic as I own 2 short-term rentals in Kissimmee (and a 3rd under contract). The short answer is that vacancy rates declined over the past months, but recently I've been seeing a healthy pickup in demand, and I expect this to continue. With that being said, the short term rentals that are doing well have the following characteristics:- Private single-family houses- Private pool- Excellent cleanlinessMy conclusion is that in the future travelers will prefer local travel (vs top-10 destinations, hotspots), and will favor privacy, contactless check-in and check-out, and will not want to share amenities and common areas. Kissimmee is a great area for short term rentals and should do extremely well once parks start seeing a higher level of visitors. A few zip codes where I focus are 34746 and 34747, as the former is closer to the airport and the latter is in a better area and closer to Animal Kingdom. Happy to share more information and talk more about it anytime!Serena

Muhammad Saad · Answer

@Jaclyn Lignos Did you guys end up buying TH in Windsor?

Courtney Radmall · Answer

We own a townhome in Kissimmee and would be happy to answer questions. We self manage and have a local team that handles all of the things. Feel free to message me.

Keith Courtney · Answer

Jaclyn -I have been involved with a good number of purchases of townhouses in Windsor Hills. I think your idea is a good one, but I wouldn't buy one yet. More have come on the market recently and the prices have weakened some, and I think they may weaken further because rentals are down this summer due to Covid-19 and more townhouses may come on the market in August and September.I have a pro forma statement showing the profit you can expect from a Windsor Hills townhouse during normal times. It's based on actual numbers of other W H townhouses. Let me know if you would like me to send it to you.Keith

Serena Kim · Answer

@Jaclyn LignosIf you type @ and add the name you should be able to tag people. It took me a bit to figure it out myself. Regarding specific neighborhoods: In 34746 try to stay close to the Poinciana Blvd, and as north as possible. I personally own in Indian Wells and Montego. I wouldn't buy south of Montego as it starts to get far from the parks. In 34747 try to stay as close to the I-4 as possible. The one under contract is very close to the I-4, making it easy to get to the parks. When I look at houses I look for the following:- Low HOA fees. That automatically removes resorts. Usually these resorts have a lot of great amenities, but my thesis is that guests would rather have a private pool than share it with other guests- SFH. No condos, townhomes, etc. Most condos don't allow short term rentals anyway- Pool. I used to own an SFH without a pool. While it rented fine, I noticed that a pool was commending $30-50 more per night. Since then I don't even look at houses without one.- Roof. A lot of homes in these zip codes were built around the year 2000, and many are coming to the market now with their original roof. Watch out for that.

Courtney Radmall · Answer

@Muhammad Saad send me a message

Muhammad Saad · Answer

@Courtney Radmall Can you please share your contact for cleaning/handyman in Kissimmee area? How was your experience self managing?

Alice Horn · Answer

@Jaclyn Lignos - here is some more food for thought. Vacation rentals certainly are increasing in demand since Covid. Families who just need to GET AWAY feel comfortable with the safety, privacy, and (hopefully) cleanliness they can find in a rental. For the first time ever, vacation rentals overall are getting more bookings than hotels. Also,1. Pool homes are doing exceptionally well in the Orlando market. For many families who may not have a pool at home (or even those that do) this is an added attraction and way to keep kids busy, especially since the parks are closed.2. We manage 75+ homes in Orlando, Kissimmee and Davenport, and we have seen both townhomes as well as SF homes perform well as long as they do have a pool. Some of our nicely decorated townhomes do really well, especially since now families are typically not traveling with larger groups.3. Unfortunately sometimes vacation rentals have been used recently to throw parties now that bars and clubs are closed. Buying a home in the right gated community with good security (Windsor Hills is a great example) is well worth while, as well as having a strong rental agreement with guests which spells out the penalties for this type of use. It will also give your families a stronger sense of security, and they will be able to enjoy a clubhouse, great amenities, etc. All of the above will translate to higher rates.4. When you're decorating the home, recognize it now needs to be disinfected and sanitized between each use, For example, this means lightweight white comforters which can be washed between each guest and will look crisp and clean in photos. Happy to help! We use software which can quickly provide a real time market analysis and projections so you can analyze different home sizes, types, and communities.Alice

Frank DiGiorgio · Answer

Hi Keith, Great info! I would love that Pro-Forma if you're willing to share! Please message me. -Sorry to Hijack your post Jaclyn! :)Thanks!

Jaclyn Lignos · Answer

Keith,That would be great. I appreciate it!! Its funny you mentioned waiting...my husband and I were just talking about that last night. We may hold off a month or two and see what happens to prices. Thanks for that input!