Orlando is a popular area for real estate investors who want rental income because it’s one of the top U.S. tourist destinations and the theme park capital of the world, thanks to Walt Disney World, Universal Orlando, and Sea World. More and more holiday travelers are opting to rent vacation homes instead of staying in hotels because they are less expensive, and you often get just as good, if not better, amenities.
The area is a popular draw for investors from overseas, especially the U.K. But buying a property from such a great distance can be challenging, especially if you’re attempting to do it on your own. If you make a decision solely on price, for instance, you may find yourself in big trouble. Orlando has many excellent areas for rentals and some poor areas as well. Here are some common mistakes to avoid when buying property in Central Florida:
Location – As with any real estate purchase, it all comes down to location, location, location. If you’re buying a property to do a short-term rental, you need to know which communities allow that type of rental. The city of Orlando does not. But many communities located near the theme parks do. An experienced real estate agent can help guide you to the right communities that offer the amenities you want, at a price you can afford.
Size – Many people focus on price instead of size when buying a house. But square footage needs to be taken into consideration too, especially if you plan to rent it out. If you don’t get the size right, you may find yourself with a small pool of potential renters. The advantage of buying property in the Orlando area is that there is such a wide variety available – from 2 or 3 bedroom townhomes to 15 bedroom luxury villas that can accommodate large families.
HOAs – Many communities in Central Florida and Orlando belong to Homeowner Associations (HOAs). These private groups manage the services and amenities in the community, and set standards for the neighborhood’s appearance. An HOA can be a benefit to a homeowner. But problems can occur when an investor purchases a property and realizes too late that the HOA does not permit any rentals at all. It’s important to find out about any HOA restrictions and the fees they charge, to make sure it’s worth your while to invest in a particular property.
Condition – Many investors choose to buy foreclosures so they can do any necessary repairs to get the home ready to rent, or they buy brand new homes that need few ongoing repairs. But this strategy may cause you to overlook an excellent property that needs only superficial work.
Plan on budgeting for repairs and updates. Look for properties that need sensible fixes such as new carpet, fresh paint, appliances and fans. Avoid properties that need a new roof or patio, since those items will be out of your budget, and won’t help you generate larger rental income.
Price – It’s natural to want to pay as little as possible for a property. You can still find some great deals in the Orlando area, although prices have been on the rise in recent months. When you find a property, and hold onto it for five to ten years, you can stand to make a decent capital gain in addition to your rental income. Consult a real estate agent with experience in the vacation home market to ensure you find a property that will appeal to holiday visitors.
Team Donovan is the leading Central Florida real estate firm that specializes in the sale of properties for use as a second home, investment or both. Don’t just take our word for it. Visit our testimonials page to learn what our clients had to say about their experience with Team Donovan. When you’re ready to start your home search, contact us at 407-705-2616.