Wednesday, September 4, 2019 / by Top Villas Realty
Buying an investment home in Orlando is a very exciting time in your life, choosing the right home and not being pressured by any realtor is one of the most important choices you can make. Many owners who have already purchased what they feel is a dream home often come to us to help market their home for short term vacation rentals and soon learn that the home they have been sold is not actually the best home to maximise on rental revenue.
Take a read of our short guide on the biggest areas to consider before purchasing an investment home here in Orlando.
Location Location Location
The most important decision you will make with any real estate investment is location. Firstly you need to decide if you are looking for a long term lease or are looking to capitalise on the booming vacation rental industry. For now let us look at the short-term vacation in Orlando. In Orlando only very specific areas are zoned for short term rentals. Luckily the area that allows rentals is based directly outside of Disney World. Depending on budget we would recommend taking a further look at homes based in Reunion Resort, Encore Resort, Championsgate, Solara Resort or the new community of Windsor Island Resort.
What size home generates the best return?
The million dollar question. The general rule of thumb is the more number of bedrooms a home has the better the return, however, the more money will be needed up front to purchase. The reason behind this is if you take a standard community such as Solara Resort, the running costs for a 5 bed will not be much different than that of a 9 bedroom home. Yet the weekly rental rate for a 5 bedroom will be $1140 compared to a 9 bedroom rate of $3900. Remember to also not pay above market value for the property.
Finance Vs Cash
Many people look to buy a smaller vacation home here in Orlando of say up to $200,000 in cash. You will still get a return on a property at this price range however if you look to use the $200,000 and finance the investment at a low interest rate you can now afford a $500,000 which means you can now purchase a much larger home that will maximise your rental revenue.
How much should I be paying for a home?
When purchasing a home, you will find many realtors pushing certain listings to you. Do not worry, we based all of our home sales off past sales known as “Comps” (Comparable properties). We also take a look at the current rentals in place and how it looks moving forward before we advise our investors and buyers if the property makes sense or not.
Does it matter what the home looks like?
Yes and no, modern homes are certainly much easier to book over more traditional style homes, this is due to them looking cleaner and more up to date. Having a nice outlook and fun rooms also really helps. Remember when buying a home for the short term rental market, it’s all about how your home looks in our photos and videos.
What must my house have in it to be a successful rental home?
The more fun factors your home has and the nicer it looks on photos the easier it is for you to maximise your bookings and overall revenue. Certain elements are an absolute must and should be in all Orlando short term rental market.
Pool - Most vacation rental homes already come with pools, never buy a home that does not have a pool. A spa is certainly a very nice feature if it has it and we would always recommend a spa home over a non-spa home.
Games room - When you are not at the parks you will be at your home, however making sure everyone in entertained is a big factor. Creating unique and fun spaces for all the family is one way to make sure everyone's time as fun as possible.
Movie room - There is nothing better than sitting down together with all the family to enjoy a movie or two, it’s another great way to keep all the family entertained during the stay.
Themed room - When coming to Orlando - 90% of the guests who will be staying in your home will be coming with young children, creating a tasteful themed room in your home increases bookings over non-themed homes.