Central Florida Vacation Rentals

[Jeff Bullian]

Dear all,

I wanted to see if anyone had general views on the Central Florida vacation rental market.  I'd be particularly interested in thoughts on two cities: Kissimmee and Davenport, both of which have good proximity to Disney and have a large number of developments zoned for short-term rentals.  

Overall, my initial research suggests that high short-term cap-rates may be feasible, but I'd be concerned about the lack of scarcity of land; presumably someone can just start building another newer-and-better development so supply might increase significantly.

It seems Kissimmee is slightly skewed toward families visiting Disney while Davenport may be a bit more on golfers, but would love someone to corroborate this.

Also, I would seek to invest and manage these properties (no more than 1 or 2 to start) remotely.  Does anyone have a view on the best property management companies in these areas?  In particular, I would want to handle the front-end (e.g. reservations, availability, pricing) on my own but would seek to retain someone to do cleaning, servicing, key exchange, property management, etc.  I know the full-service approach can be quite expensive -- 30%+ of gross revenues -- but am wondering if anyone is willing to perform only some services.

Last, my research indicates that bank financing is typically available at up to 80% LTV without PMI for these vacation properties, depending on credit.  Can anyone corroborate this?

Thanks so much for everyone's input.  Would love to make connections in the area as I continue to investigate.

All the best,

Jeff

[Peter R.]

Originally posted by @Jeff Bullian:

Dear all,

 Does anyone have a view on the best property management companies in these areas?  In particular, I would want to handle the front-end (e.g. reservations, availability, pricing) on my own but would seek to retain someone to do cleaning, servicing, key exchange, property management, etc.

Hey Jeff,

If you're going to do the front-end work yourself I don't think you need a property management company.  What you need is a good cleaner and a good handyman.  And of those two, one needs to be ok with getting paid for hourly based tasks outside of their specialty area.  

A good example is cable repair, you need someone to be there between the hours BrightHouse specifies to let the repair guy in, wait while he fixes the problem, confirm the fix, and sign the paperwork.

It may only happen a few times a year but it's far cheaper to pay someone a few hours a year than a property manager.

And if you put a remotely managed keypad deadbolt on the property, make the key exchange a code exchange by email as a part of your tenant welcome flow.  Add in bulk, delete used codes after departure.

As for your location, I'd do Kissimmee over Davenport unless you're trying to split the difference between the Orlando attractions and Legoland or something like that. In which case Davenport makes some sense. 

On the loans, I'm guessing when you get into it you'll find they'll want closer to 30% than 20%.  Unless you've got a track record with a local bank in your area.