Hi @Vicki Moraes, thank you for the nice comment! I work hard in this area and I love VR's in the area.
The "best investment" will vary considerably based on your goals, your price range, and whether or not you're financing or paying cash.
There are a few points you bring up, so I'll address them as I see them:
No. of Bedrooms: The basic rule of thumb here is that the more bedrooms the better. With each additional bedroom, there is a new plateau of price that you can charge for a VR. People are traveling in larger groups more than ever, and the more bedrooms you can afford, the better. So, yes, a 5 bedroom (in general) would be better than a 4 bed if all other things were equal. The problem is, it rarely is equal. Every neighborhood is different. Proximity to Disney is key, and so is interior furnishings. But, as a baseline, the more bedrooms the better. But, if you asked me if a 6, 7, or 11 bedroom is better, I would say the 11 bed is better. The more bedrooms the better, there doesn't seem to be a ceiling on this.
Higher Earning Potential: Vacation Rentals ALWAYS have a higher earning potential than a long term. But it's higher risk, and more volatile. The nature of it is different. Let's take a basic two bedroom condo in Windsor Palms for instance. This is a nice neighborhood that has some long term residents, but is also a popular short term rental community. A 2 bed there in a long term rental can generate about $1100-$1200/month at 100% occupancy. The exact same home can generate about $2200-2400/month at 100% occupancy as a Vacation Rental. So literally double the revenue. However, you'll never have 100% occupancy in a short term rental. Not even busy hotels have 100% occupancy. You may get 60%, or 70% or 80%... all depending how you market it, and what type of an owner you are. This is why, when it comes to investing, I need to get to know the clients.. how invested are they in running the home as a business, investing cash to improve interiors, etc... this will determine what kind of property I recommend, and your earning potential. This isn't like the stock market, where all 5 beds generate a certain average income, and all 4 beds are similar... it varies a LOT.. and it's almost completely dependent on the owner, or the decisions the owner makes about their investment. I can recommend smart decisions to maximize your occupancy, that's part of my job as a person who caters to investors.. but also part of my job is breaking the mindset that it's so cut and dry. There is no baseline, I know the potential, and I can help you gain the most out of a property, but at the end of the day, it's up to the owner catering to the market, and using the investment as a business. I hope this makes sense. I know I'm long-winded, I just want you to have an accurate picture of what you're looking at.
Price Point: At the price point of $125,000, you can definitely buy a vacation rental, but this is VERY entry level... consider that almost all the homes for sale that are zoned for short term will need a cash investment after purchase to get the furnishings up to par with the market, etc.. this will afford you a 2 bed, maybe a 3 bed if you're lucky, but not leave a lot of room for closing costs and furnishings, etc... At this price point, understand that it's a high risk investment, and that buying something to use for a long term lease will be much more predictable, just not quite as high of an earning potential.
Property Management: This is the most important aspect to your vacation rental. You MUST have a stellar PM company. This is the manager of your business. They are the face to your guests as their concierge, as their problem solver and customer service. They're also coordinating all the finances, from utilities, business licenses, taxes, HOA, etc.. They're also able to do all the bookings for you. Basically, this is how you put your business on auto-pilot. But you need an excellent PM. After everything is done and everyone is paid, it's possible to make more in a Vacation Rental than a long term rental. Just be aware that the risk is much higher, and it takes more of a capital investment and time on the front end to get it on auto-pilot. If you're more risk-averse, I would recommend getting a long term rental as an investment. They're more predictable, and easier to keep high occupancy, and easier to manage. If you want to take some risks, hustle, invest some money up front and make some money while owning a vacation rental that you can enjoy every now again, then it might be for you.
People who want a very hands off experience while owning a VR can do it, but you need to be in the $500,000 range to get everything lined up properly. You can get a killer return at the higher dollar marks. It's harder to do at the lower marks. Very possible, but it's just more involved. If you want something hands off, maybe invest in a mutual fund or something. I heard the US stock market is on sale this week :)
I hope this helps!! Feel free to PM me or contact me anytime if you have more questions or want to learn more about it :)
