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Updated 3 months ago on . Most recent reply

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14
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Frank Vanegas
  • Rental Property Investor
  • Queens, NY
7
Votes |
14
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Short Term or Long Term Rental In Orlando Florida

Frank Vanegas
  • Rental Property Investor
  • Queens, NY
Posted

Hello Everyone,

I am a first time Home Buyer/ Investor looking to purchase a home in the Orlando Area. I was pre-approved for a conventional mortgage with a 3 % down payment 2.75 Interest Rate. My Budget is 200k for this property. I was told by my lender that this has to be my primary residence for some time.  I've looked in Clermont, Kissimmee, and davenport. I've used the calculators BP has provided and most of these Homes don't cashflow. If I go by the 1% percent rule a home that cost 200k would have to gross 2k in rent, Homes I've seen typically rent for 1450 - 1550 max. 

This leads me to explore Short Term Rentals. I checked the website AirDna and most homes that rent well offer a pool as an amenity.  These homes are 30-50k over my budget. Should I stay within my Budget or pay more for potential earnings? I'm looking for any Knowledge that can help me make a sound decision thanks.

Most Popular Reply

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1,075
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850
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Shawn McCormick
  • Realtor
  • Orlando, FL
850
Votes |
1,075
Posts
Shawn McCormick
  • Realtor
  • Orlando, FL
Replied

Hi @Frank Vanegas. I live in Clermont and depending on where you are looking $200 will be pretty tough to find at all. Rents for long term have been steadily increasing for years here, but you're right, they do top out at some point. Cash flowing in the type of market we have is extremely difficult, especially with such a small down payment. 

I don't agree with your lender that you have to live in the property if you are using a conventional loan, but depends on what product they are giving you, maybe a work around for that.

I would not purchase based solely on what income you can derive from STR. That market is recovering, but with covid still taking a stranglehold on the Country and tourism, you need to have the numbers work as a long term rental also. We are experiencing fantastic appreciation here, but most investors want cash flow or both and this isn't the right market for that if you are new(er).

I am a full time Realtor® and investor in this area so I would be happy to help navigate this with you if you need some help. Reach out anytime.

  • Shawn McCormick
  • Loading replies...