Vacation Rental near Orlando

[Jon S Strick]

Hello, 

I am going to purchase a vacation rental in the Central Florida (Orlando) area. Compared to other places in US, new construction homes still seem fair priced and I think they could cash flow as a vacation rental. Has anyone had experience with a SFR or Condo as a vacation rental in the Orlando area?

One property I am looking at on the MLS is a 3/2 new construction with pool for $260,000. No HOA, in a subdivision.

My primary goal is to own real estate where my family vacations. Breaking even would be a win in my eyes. 

Could anyone share insight on this type of investing, and/or share a good realtor/property management team to get started. 

I invest in SFR and small MultiFamily in Green Bay/Appleton area and would be happy to help anyone find properties in this great cash flow market.

Thank You,

Jon 

Strick Properties

[James Fitzgibbon]

I am a real estate investor and broker here in Orlando. I looked into this as a business three years ago and considered purchasing SFR's to rent to vacationers. I talked to a number of brokers who specialize in this and they basically told me it is not an investment, it is an expense. You have a lot of foreign buyers who fall in love with Disney and Orlando and purchase second homes here. Most of them will rent them to minimize their cost, but they do not make money or break even. That was three years ago and the pricing has gone up since then. Make sure you are talking to a broker who does not manage these properties to make sure you are getting a honest opinion. Also make sure the county you are considering purchasing in will allow vacation rental owners, because Orange County does not. They even encourage neighbors to turn in illegal vacation rentals owners. Some parts of Osceola County do allow it. Having owned a mountain home that was supposed to break even (lost a bundle) and condo at the beach (that is paid for and just breaks even), I can honestly say that I have gone down this route and it makes more sense financially to purchase a great cash flowing property in your area and use the cash flow to rent a vacation home from one of the rental companies. You can rent a really nice one for less than it would cost to own it. Plus you would not have to worry about hurricanes like the one that is approaching this weekend. Insurance is expensive in Florida so make sure you get an actual quote to run your numbers.

That being said, my wife would never let me sell our beach condo so it is a lifestyle thing.  You may have to take off your investor lenses to make it really work.  I hope I did not burst your bubble. I just thought you might want an opinion from someone who has traveled a similar path. Good luck.