I’d tend to stay away from short-term rentals. Other than that though, I think your best bet is with a house. Condos give you less control. If the condo association doesn’t budget correctly or gets mis-managed, then you might get stuck with special assessments that could really break the bank. You really can’t control how condo associations maintain the common areas or do repairs to the parking lot, roof, exterior, etc.
A house gives you more control and is normally easier to re-sell.
Hi I am looking into buying a 3 bd. 2 bath Villa in Kissimee, Florida (near disney world). It is among other villas that are all “short-term” rentals. Many owners are out-of-state and use the internet to rent out the villas. Other owners also employ a management co. to rent out the villas. Has anyone ever done this with success? How many days per year at what average rate were you able to rent the villa out for? I called a management co. and he says the way his company works is they rent the villa, so many days per year from the owner for 50$/day and turn around and rent it to vacationers for retail at around 85-100/day. The difference is the management co’s profit.
An average 3 bed. villa about 7-10 years old costs around 95K.
James B
Check things out carefully. Short-term rentals are a very different ballgame than a normal rental property. The State of Florida treats these similar to hotels, meaning special licenses, special laws, resort taxes, etc. You will need to manage this like a hotel including: monthly/weekly bookings, a cleaning/painting service when people leave, etc. I wouldn’t touch one of these unless you plan on having it professionally managed. Otherwise you are going to have a LOT of work ahead of you.
Also, I’ve had a few listings of people trying to sell these sort of properties. Since the September 11 attacks, these properties have become almost impossible to sell (and not that easy to rent at a decent occupancy rate) because of the slow tourist market around Orlando/Kissimmee.
I have some friends who bought a unit in 1999, got a taste of the hard work for 2 years. Then September 11 hit. The property was vacant 50% of the time, so they decided to sell. They listed it with me for 9 months without success. They listed it with another Realtor for 6 months without success. In January, they finally ended up renting it to a Disney employee for a year with negative cashflow. There were 5 to 10 units for sale in the complex all the time and none of them were selling either.
Of course, this is an area to find many motivated sellers. Especially if you could simply buy one of these properties cheaply or subject to the existing mortgage and then lease option it out or hold it as a regular rental property.
I do know that property in Orlando has gone up over the last 10yrs. A 2 bed 2 bath Condo that sold for 55K in 1993 goes for 85K now. I don’t remember if this paricular condo was a short-term rental or not. Would you rather recommend me buying a house or condo (not short-term rental condo) and renting it out like a regular rental? I really want to take advantage of the Orlando market, since I feel it will appreciate a lot over the long term. Plus, I go there every year (for disney world).
James B
I also tend to stay away from short-term rentals. Other than that I have bought a villa in Dubai through UAE Off-Plan. What do you guys think buying villa in Dubai ??
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Before considering investing in short-term rental, think if you’ll have the time to manage the property or whether you can afford to hire a professional to do it for you. As the State Of Florida treats these the same as hotels, it means you will have to deal with special licenses, resort taxes, keep up with the bookings and make sure the place it’s clean after the people leave.