How is the Lake Nona/Orlando Market?

Question

Hi again! My husband and I, who live in CA,  are deciding on buying an investment property but we are also taking into consideration my mother, who we currently help with rent down in Lake Nona. If we were to buy something in Lake Nona, it would obviously not cash flow as we would have her move in and essentially just help a bit with the mortgage, but how is appreciation looking in that market? I haven't seen Orlando on many lists of cities to invest in.  Ideally we would buy a multi family property here in San Diego and have her live in one while renting the other, but the math just doesn't add up in SoCal now, maybe not ever, so for now we will probably keep her in FL. We do feel like we are throwing money away helping her with rent when we could be putting it towards an investment property instead, but there is always the fear of pulling the trigger on the first home that isn't your primary.

Shawn McCormick · Answer

@Flavia Vangelotti Orlando is still a very good, appreciating market. Cash flow has been super tough for the past 3-4 years since prices jumped during COVID. Lake Nona is still a premier area and entry level price points are higher here than most anywhere in Orlando. Median prices are low to mid $400's, but in Lake Nona you are pushing $500. The retail is booming, the only downside IMO, is the infrastructure. The main road (narcoosee) lacks the ability to commute well if that is your main way in and out. The high school sits right on this road and so do all the big box stores and restaurants. But still a very sought after area.

There are exceptions to some communities a little South and East of Lake Nona and taper off a bit in Saint Cloud. So if you can trade off some cash flow subsidies for her, you will make it up in appreciation as there is still so much land there.

As far as location, it is very sought after as it is is very close to the airport, easy access to the Space Coast on the 528, the 417 will take you right to Disney and downtown is just West on the 408. These are all toll roads, but easy drives.

Hope this helps, let me know if I could help further.

Best of luck!

Nicholas L. · Answer

@Flavia Vangelotti

this seems like a great thing to think through, but also hard to advise on since it's a question of both investing and family!  you got some great advice from folks who know the Orlando market really well.

i was struck by something you said, though - "resell it in a few years."

in general, your hold time for an investment property should be indefinite.  transacting - buying and selling - is expensive and can consume years of gains, with all of the commissions and fees you have to pay.  so, just something for you to think about - that a 3 or 5 or 7 year hold period probably won't get you enough appreciation to offset transaction costs.  if you want to buy something in orlando and hold forever - great!  but I don't think 2025-2030 is going to be the same as 2019-2024.

good luck!

Flavia Vangelotti · Answer

Thanks for commenting! She works out of Lake Nona right now and her job is pretty stable so I would like to keep her near her work, I also like how safe the area is in comparison to some others in Orlando. I do like Ocala and Winter Haven as well but too far of a commute from her job unfortunately.

I am excited to start our journey, I think figuring out the first thing is always the hardest part

Chris Rich · Answer

Lake Nona is one of the fastest growing areas in the Orlando metro, but like Shawn said the infrastructure is already over loaded... but they keep building.  Obviously appreciation isn't guaranteed, and COVID really drove up prices, but we've already seen the market correct itself.  We're at a near record high for median sale price.  Rental rates are pretty strong too if you wanted the option to rent it out down the road.

Like I told my friend in a conversation recently while we were discussing home values... That completely average 1,300 sqft, 3/2 house in California currently valued at $1.1M was once valued at $250,000...

As long as people keep migrating to Florida and the economy remains strong, there is no reason to think home values won't continue increasing, especially if you are looking to hold for multiple years.

Giuseppe Pavone · Answer

@Flavia Vangelotti sounds like you're in a great spot financially to get into real estate investing if that's what you want to do ultimately.  I understand where you're coming from, it's a mindset shift and I think many (if not most) people here will tell you that the shift occurred after reading "Rich Dad, Poor Dad"... so if you haven't read that, you may want to.

Buying a property for your mom that you have to put money into each month even after the mortgage is paid off (taxes, insurance, maintenance) will only work if you have significant appreciation to offset that, which is what you probably experienced in California (and I experienced in Canada).  But it's risky and can go the other way also.  And you'll only realize the gains after you sell it or refinance and pull out some equity.

Having a rental property can pay your monthly expenses, plus hopefully some profit, and if it doesn't appreciate, who cares, you're still making money, paying down the mortgage, etc.  And if it does appreciate (which is more likely), it's a bonus!

Jacopo Iasiello · Answer

Hi Flavia, Research the local market trends, economic indicators, job growth, and development plans in the area to gauge its long-term potential. Keep in mind that while cash flow may be minimal if your mother lives in the property, potential appreciation could still make it a viable investment over time.

Jacob Sanders · Answer

@Flavia Vangelotti Right now, the Orlando market is tough because prices keep going up. But, the value of properties has been going up steadily, and lots of people want to rent.

So, even if a deal seems just okay this year, it could turn into a really good one in the next couple years.

Also, selling houses in Orlando is super competitive these days. Some homes are sold in less than a couple hours! I recommend looking within an hour's drive of Orlando where the numbers look better, and there's not as much competition.

Flavia Vangelotti · Answer

This makes so much sense, thank you! I am thinking if we bought it for my mom it would be with the understanding that we wont make anything on it until we resell it in a few years, looking at rent in the area it wouldnt cash flow if we were to rent anything out with the current rates. @Jacob Sanders thank you also for your advice. I might be reaching back out to you both in the near future

Lisandro Maldonado · Answer

Hey @Flavia Vangelotti!

Have you ever considered looking past Orlando toward the Osceola County and Polk County regions? These areas are growing in a way that is unprojected. For example, Davenport, at this time, has more than 5 different communities being built all at the same time! This opens up huge opportunities for you to be able to BRRRR in this area. Also, places like Lakeland and Winter Haven are growing tremendously on investors' radars for people that are trying to flip or wholesale homes. Whatever route you decide to take, I hope your real estate journey is more than prosperous!

Jacob Sanders · Answer

@Flavia Vangelotti With your expressed concern for cash flow, I suggest considering a Debt-Service Coverage Ratio (DSCR) loan. This type of financing requires the projected income of the property, determined by a local expert, to sufficiently cover the monthly mortgage debt. This provides assurance of a stable investment. Additionally, satisfactory credit (typically 680+) and a down payment of at least 20% are typically required to qualify.

- I'm not an expert in lending, so please do your due diligence in verifying this information.

Rich dad poor dad is the reason I became an Investor/Realtor! I wish I listened to my teacher when he made us read it in highschool!

How is the Lake Nona/Orlando Market?

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