Are you considering investing in a vacation rental property in Orlando? With its theme parks, sunny weather, and vibrant nightlife, Orlando is one of the most popular tourist destinations in the world.
But is it a good place to buy vacation rental property? Let’s take a look at some factors that can help you make an informed decision.
The Orlando Vacation Rental Market
According to a report by the National Association of Realtors, Florida is one of the top states for vacation home sales. In 2019, 11% of all U.S. vacation homes were purchased in Florida. Orlando, being a major tourist destination in Florida, has a thriving vacation rental market.
Seasonal Demand
Orlando’s peak tourist season is from December through April when visitors flock to the city to escape colder climates. However, the city also experiences steady tourism throughout the year due to events such as conventions and music festivals. This consistent demand makes Orlando an attractive location for buying vacation rental property.
Regulations
Before investing in a vacation rental property in Orlando, it’s important to be aware of local regulations. In December 2018, the city passed strict regulations on short-term rentals which require owners to obtain permits and adhere to certain safety standards. While this may seem like an added hurdle for investors, it also ensures that the market remains stable and safe for tourists.
The Benefits of Owning Vacation Rental Property in Orlando
1. High Occupancy Rates
Orlando’s tourism industry is booming with millions of visitors every year. This means that there is a high demand for accommodation options such as vacation rental properties. According to AirDNA data, average occupancy rates for Airbnb rentals in Orlando are around 70%, which translates into good returns on investment.
2. Diversified Investment Portfolio
Investing in a vacation rental property in Orlando can be a great way to diversify your investment portfolio. With the right property and management, you can earn a steady stream of passive income while also benefitting from appreciation in property value.
3. Tax Benefits
Owning a vacation rental property in Orlando also comes with tax benefits. You can deduct expenses such as mortgage interest, property taxes, and maintenance costs from your rental income which can help reduce your tax liability.
The Drawbacks of Owning Vacation Rental Property in Orlando
1. Seasonal Fluctuations
While Orlando does experience steady tourism throughout the year, there are still seasonal fluctuations that can affect occupancy rates and rental income. During the summer months, for example, the weather can get very hot and humid which may deter some tourists from visiting.
2. Competition
With so many vacation rental properties available in Orlando, competition can be fierce. It’s important to choose a location that is easily accessible to major attractions and has unique features that set it apart from other properties.
3. Management and Maintenance
Owning a vacation rental property requires ongoing management and maintenance tasks such as cleaning, repairs, and guest communication. If you’re not able to manage these tasks yourself, you’ll need to hire a property manager which will eat into your profits.
Conclusion
So is Orlando a good place to buy vacation rental property? The answer is yes – if you do your due diligence and choose the right location with unique features that set it apart from other properties. With high occupancy rates, tax benefits, and a diversified investment portfolio, investing in an Orlando vacation rental property can be a lucrative venture for those willing to put in the work.