Our essential guide to owning a vacation rental in Orlando
Owning a vacation rental home in Orlando should be a wonderful experience for you and your family and if you are considering buying a home in Orlando we hope it’s a very profitable one for you.
There are typically two types of buyers in the Orlando Vacation home buying market, the first is purchasing a house as a family second home and may or may not rent the home out to other guests. The second category is where the majority of our Orlando homeowners fall into, they purchase a home mainly as an investment and use the home when it is not booked out. The difference between these two clients is one group doesn’t care about the overheads of owning a home but for the second type that is the number one priority.
The vast majority of owners who buy one home, make great money, and go on to purchase multiple villas and vacation homes here in Orlando. Unfortunately, there are some owners who buy a home and it ends up costing them money. With over 80 million people coming here each year, not making money on your vacation home investment should never be an issue.
What home should I buy?
The million-dollar question, or $300,000 dollar question. To understand what home will generate you the best return or ROI it all depends on your budget. Generally speaking, the more you can spend the more money you can make.
Spend more – make more
The theory behind this is that the overheads on a 5 bedroom home are not that much different from a 10 bedroom home. This is because many of the fees involved with owning a vacation villa such as property management fees, pool cleaning, HOA fees, Insurance, and utility bills do not vary too much between sizes of home.
Rental income from small homes vs large homes
The rental rates that you can charge for an Orlando vacation home vary greatly between resort and bedroom size. For example, a 5 bedroom villa in Champions Gate will rent for under $2000 where a 5 bedroom in Reunion Resort can rent for closer to $4000 per week.
But looking at a comparison of similar homes in the same resort such as Champions Gate and you will see the following.
Weekly rates from:
5 bedroom Champions Gate home – $1409 per week
8 Bedroom Champions Gate home – $2518 per week
To see true actual rental rates feel free to browse our vacation rental site with homes in our top communities such as:
It is also worth pointing out that to get better rental figures you, of course, need to spend more money on your purchase and with more bedrooms means more furniture to buy.
From studying rental analysis on homes that start at 5 bedrooms and 3000 square feet up to mega-mansions with private bowling alleys, indoor basketball courts the % return based on the purchase price is always the same and typically within 2 percentage points either side of each other. This means as long as you follow some very basic and almost obvious steps, no matter which homes you buy the results the % return on cash down will always be very similar.
Our most popular Vacation Rental Communities to buy-in.
Reunion Resort vacation homes for sale
Champions Gate vacation homes for sale
Bears Den vacation homes for sale
Windsor Hills vacation homes for sale
Windsor at Westside vacation homes for sale
Encore Resort vacation homes for sale
So what home will make me the best return?
As we have concluded, when owning a vacation rental in Orlando no matter which home you decide to buy, the % return will be similar to that of a similar home in your area that could be smaller or larger.
Use your own instinct to know what home is right for you. If you are buying a home in Orlando for an investment purpose and looking to make money from it then please leave your emotions at the door and put yourself in a guest’s shoes. Guests book vacation homes from pictures and videos online, so having some key wow factors certainly helps bookings.
What influences a guest’s choice of home?
When choosing a home to purchase in Orlando for investment it’s fairly easy to figure out on your own which homes are going to rent better than others. The biggest factors to consider when buying a resale home are as follows.
The saying is location, location, location and they are certainly not wrong when it comes to buying a home in Orlando. Choosing a resort community as close to Disney is always advisable as no one wishes to drive 30 minutes to the theme parks each day.
Guests love to come on vacation and book a home with a large pool. Make sure your pool has a hot tub, looks inviting, and has plenty of deck space for several sun loungers that compliment the number of guests that can sleep in the house. If the house has 10 bedrooms and sleeps 20 persons we would expect to see at least 14 sun loungers.
South facing pool
Many European guests, especially the British are set on having a South facing pool, they want to enjoy as much sunshine as possible on the pool deck. We would always advise where possible to purchase a home that is either South Facing or West Facing.
For some people, the view is not important, and in many communities homes back onto another house so you can pretty much talk to your neighbors through your pool cage. This for most guests is less than ideal. People save a lot of money to come on vacation for privacy and to relax so you can choose a private back yard that is not overlooked from the back. Golf course views, lakefront views, or conservation views are always ideal.
Going on holiday to Orlando is meant to be fun so make sure your house is as fun as it can be. Your home may have 10 bedrooms but if the home is not set up to entertain 20 people then it may not do as well as you might expect. Instead, choose a home that has a large number of bedrooms and entertainment areas to match, this could mean converting a garage or one of the bedrooms to make more use of the space.
The way a house is furnished can really influence how well a house will book. If you decide to buy a great house but leave the 20-year-old furniture in place, there is a very good chance the home will not be able to compete against a much newer home or one that has had a renovation. Read our article here
Hopefully, this has made you put your thinking cap on, if you are still unsure, let our Orlando vacation rental real estate team. We are happy to send you the best homes we see currently on the market and can even provide rental figures and estimates for you to look over.
Buying in a new build resort
We hear of many homeowners who get offered a product with a projected rental income, they do the math, and buy the house without even stepping foot in the property. No research has been done and they simply took the word of the real estate agent they thought they could trust. Remember most realtors work off a commission so will showcase you some of the higher and newer communities.
The best new build vacation rental communities
Always get a comparable rental figure of similar homes in a similar resort to see if the figures you are being told actually stack up.
The sale pitch and projected revenue
When buying in any new resort the sales team will work with local property management often referred to as “preferred partners”. Most of the time the sales team will provide you with projected rental analysis and costings for the floor plan you are most interested in. If this is a brand new resort be slightly cautious of these figures as they are only “estimates” and will no doubt showcase you the best-case scenario.
The general rule has always been the more bedrooms the better your return. This should always be true as overheads on a larger home do not go up at the same rate as rental income does.
However, buy a house that has the maximum number of bedrooms without compromising on living space. Here are a few examples of what we mean.
If you are looking at buying a 10 bedroom house it is no good having 10 bedrooms with no games room nor cinema and only enough seating around the dining table for 10 people or space for just 6 sun loungers.
When owning a vacation rental in Orlando it is vital to make your home as fun as possible, you can do this with the furnishings and decor. As above many owners get sold a house they have never seen and then get sold a beautiful furnishings package which turns out to be the same furniture package another 500 homes in your community have. This means there is now nothing to set your home apart from anyone else’s home.
Orlando Vacation rental essential
Your home must meet what has now become very basic essential factors when buying any home. These will have either a positive or negative booking factor. Never get fooled by any realtor or salesperson who tells you, “you don’t need a pool as there is one in the resort…” if you hear this please run away.
Swimming pool and spa
Yes, your home must have its own private pool. This bigger the better with an inbuilt spa. Even if the resort has a pool,
DO NOT buy a vacation home if it does not have a private swimming pool. And try and avoid a small pool. Bigger is always better!
Pool deck area
So now we have made sure your home has a pool, guests will want to use it and sunbathe on the pool deck around it. Make sure you have as much space for a nice large deck for plenty of sun loungers, outside dining, and if you have room a nice fire pit. If the home sleeps 10 then make sure the homes can fit at least 8 sun loungers.
DO NOT buy a vacation home that has a tiny deck area.
Take the following pictures as an example.
This image below is from an 8 bedroom house that sleeps 16 people. Yet notice how only 2 sun loungers can fit. Where are the other 14 people going to relax?
Or take a look at this pool in the same resort that has way more space that is much more inviting for any potential renter.
Buying a new vacation home vs an old vacation home.
Orlando is home to nearly 40,000 vacation rentals with more being constructed every week and a question we get asked a lot is should I buy a new home or buy a resale. Each has its good and bad points.
Buying a new vacation home certainly has its benefits, with everything being brand new it’s much easier to be able to furnish to the latest trends and this alone will help rent your home. New vacation home communities certainly are appealing, they offer spec build homes and several models to walk through so you can really get a great idea on what your home will look like. With many new construction communities such as Champions Gate, Windsor Island, and Encore Resort you will find that the resort itself offers incredible amenities that really help attract vacation renters.
Buying a resale vacation home
There are several opportunities in the Orlando area to get a great vacation home for a very good price on the resale market. Homes that rent well do not typically go up for sale, only homes that are not performing as well. This creates a great opportunity as the home is still an amazing property, all you have to do is spend a small amount of money and refresh the interior paint and furnishings. This is a great way to pick up a very good deal with a huge upside reward.
Thinking about Owning a vacation rental in Orlando
Let our expert vacation rental real estate team help talk you through everything you will need to know about owning a vacation rental in Orlando, Florida. they will advise you on the best location and communities to buy-in, number of bedrooms and how to furnish your home in order to maximize your rental income.