Suggestion appreciated: Area to buy and hold at Orlando?

Question

Orlando recently draw my attention for potential next purchase for buy and hold. I'll be an out of state investor and manage it remotely. Based on my past experience, I like to focus on SFH and for longer term lease (instead of short term vacation homes).

So I'm currently consider 2 area, thinking 1500-2500 sqft. <$300k.

1. new UCF. There are other employers like Siemens also. zip code 32826, 32817

2. Alafaya, Avalon Park, zip code 32828. Those area I will more want the home with schools rating 8+.

I also looked at Lake Nona area near the airport but I feel above 2 are better? Also seems Lake Nona area has a lot of new built home at comparable price may prohibit home appreciate quick? Maybe I'm wrong.

Anyone familiar with Orlando rental market can help provide some suggestions? are my choice 1) and 2) good for rental investment? choosing between 1) and 2), which one better?

Also appreciate if anyone has good property management / investor friendly realtor to recommend.

Claudio Trevisan · Answer

Hi Bei He

In my experience/opinion, the highest quality areas include: Winter Park, College Park, and 32803. These areas offer the highest appreciation and highest quality tenants. However cash on cash return will be lowest here compared to the less quality areas. Your cashflow on year one would be $0-$100. If you plan to invest in these areas, it is extremely important to work with an agent who knows the area very well. These areas differ significantly by street. Just because the address is in Winter Park or the zip code is 32803, doesn't mean its the high quality part.

Oviedo is a great area as well thats a little more affordable. Oviedo is located in east Orlando near UCF. Oviedo is again another area that can differ in quality by section, although not as drastically as downtown orlando. All of the schools in Oviedo are highly rated.

I have recently spoke with a property manager about which areas currently offer the greatest balance between cashflow and appreciation. The top two areas recommended were: Waterford Lakes/Avalon and Meadow whisper lakes. He also mentioned Winter Garden, Oviedo, Winter Park, and Lake Nona.

Real estate in Orlando is pretty straightforward. The more expensive areas are generally higher quality and will see greater appreciation but less cashflow. If the area is really cheap, its probably not a good area. You could always invest near camping world stadium or Eatonville and receive a great cash flow. However, your probability of facing evictions will increase significantly.

I personally recommend buying the worst home in the best area. Your cashflow may not be as great as cheaper areas, but your tenant quality and appreciation will better which will give you a peace of mind while investing out of state. But it is ultimately up to you to find the right balance of cashflow to price.

Hope that helps!

Tyler Gibson · Answer

@Sophia McMillion if you ever want any information on Orlando let me know. I live work and invest here.

Brandon Reed · Answer

Hey @Manish Waj - I have a Real Estate Podcast and recently interviewed @Kim Meredith Hamptonand her husband Scott of Hampton and Hampton Leasing and Management. They were incredible and are extremely investor friendly! I would absolutely check them out if you end up investing in the Central FL area.

Mike Shulman · Answer

Hello Bie,

Your one and two choices are both great options. As long as you don't mind renting to college students. There's over 60,000 students in the UCF area, second largest college campus in the country. There's pros and cons that come with renting to college students. They are very transient and will typically only stay for one year. They're also a little bit rougher on your home. On the positive side, There is a huge influx of new tenants year after year and the school continues to grow.

as long as you find the correct deal and by right you should do great in East Orlando.

My recommendation would be buying a beat-up home And put a little TLC in it. I got wholesale deals often in this area. Let me know if you'd like any assistance.

Bei He · Answer

@Brandon Reed, thank you for the great info. Now I'm more inclined to my first 2 choice =)

Bei He · Answer

BTW. My target is property build after 2000 so maintenance won't be too much a work.

My goal is 25% down, 3-5% cash on cash return after all the cost and property management. Let me know if this is realistic or not.

Sophia McMillion · Answer

@Stone Saathoff thank you so much for reaching out. There is always a possibility we will be in San Antonio at some point in my husbands career. We actually just found out we will be heading to Huntsville, AL. If you know of anyone with a good knowledge base on that area, send them my way! :)

Stone Saathoff · Answer

@Sophia McMillion Do you know if you'd be coming to the San Antonio area? Is it a choice? I'd be happy to discuss our market here if you need any insight. I handle an average of 6 investment related transactions per month.

Sophia McMillion · Answer

@Maria T. if we ever come to the area, we would love to partner up! We currently invest where the Army takes us. As of right now it doesn’t look like Orlando is on the list. We are most likely heading to Huntsville, AL, San Antonio, TX or Warren, MI. So my research has been shifted.

Maria T. · Answer

@Sophia McMillion what type of properties are you looking for to buy and hold in Orlando?  My husband and I are interested in partnering with other investors interested in bigger size multifamily properties. We live in South Florida but Central Florida is our target market for now.

We would be happy to connect!

Suggestion appreciated: Area to buy and hold at Orlando?

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