Which STR Strategy Would You Choose? Orlando/Kissimmee

[Alex Boyce]

Hey BP,

I'm in the market to purchase my first Short Term Rental. I live in Orlando and want to invest locally. I have $75K to invest and pre-approved for $325K purchase. I've done quite a bit of research but realizing I need to narrow down on my strategy and wanted get some advice between these various paths:

1. 200-250K Townhouse in desirable community like Windsor Hills / Paradise Palms. Well within my budget and could very comfortably carry this if needed, as well as have extra cash to make the rental stand out. However, these tend not to appreciate and have high HOA costs. From what I've seen it looks like these still cash flow well though.

2. 250-275K Single Family 3-4BR house that needs work. I'll be able to customize the house to stand out, however these tend not to be in desirable areas / slightly further away from Disney, and I may not have enough to do much with (50K down + 15K furniture leaves 10K for rehab, excluding any holding costs). Also, communities with no/low HOA's typically have no amenities. However this would be the option with the most appreciation.

3. 325K Single Family 5+BR house. The kind of house I'd expect to perform the best is the huge 2800+ SQFT, 5+BR pool home. The problem is any house like this in a desirable area like Windsor Hills is easily over 400K. There are some for this price in other areas like 27 or Davenport, but I'd be at the very top of my budget, in a further market, with little leftover to make the place unique. 

Looking forward to your thoughts. Thanks!

[Marc Rice]

@Alex Boyce

I’ve found studio-1-2 beds do the best as STRs in my local market due to high volume off small groups traveling, especially with covid I’m glad we stuck to that strategy.

I’d recommend talking to some other hosts in your area and looking at similar properties on Airbnb that you’d be buying to see numbers.

There’s appreciation, cash flow, rentability to consider. What if that local city prevents STRs, will you have a backup as a LTR?