Thinking about buying a second home in Orlando? Many people dream of buying a vacation home and renting it out so they can recoup part of their investment. The key to generating a profit with a vacation home is making sure that the property is in a desirable location.
There’s no doubt that Orlando is a popular vacation destination. Visitors come here from all over the world to go to Disney World and Universal Studios, for starters. And the city’s location in the center of the state makes it easy for vacationers to drive to Tampa, and enjoy the beaches on the Gulf of Mexico, or head east to Cocoa Beach on the Atlantic Ocean and all the attractions there, like Kennedy Space Center.
Before you buy a vacation villa, it’s important to realize that there will be costs involved, just like with your primary residence. As owner, you will be responsible for the property’s utilities, management fees, insurance, taxes and HOA fees. But it’s entirely possible to make money on your vacation home as long as the costs don’t outweigh the rental income.
Here are some examples of the revenue and cost breakdown from two actual active vacation rentals in the Orlando area. These Solterra Resort luxury homes are located just minutes from the theme parks in the highly desirable community of Davenport, Florida. As you’ll see below, each vacation villa generated thousands of dollars in cash flow that could be used by the homeowner.
6 Bedroom Vacation Villa in Solterra Resort
2015 Rental Revenue - $54,260.35
15% to Management for bookings + 12% Sales and Hotel Tax = $40,586.74
Expenses
- Electric - average $400 per month = $4,800 per year
- Water - average $160 per month = $1,920
- Cable TV - included in HOA fees
- Wireless Internet and phone- $70 per month = $840
- Management Fee - $275 per month = $3,300 per year -includes management, pool cleaning, pest control>
- Cleanings - 40 cleaning @ $120 = $4,800 Property Insurance = $1,500
- Taxes - $7,800 includes CDD fees
- HOA Fees - $2,000 per year
Total Operating Costs = $26,960.00
Total Net Revenue = $ 13,626.74 per year
5 Bedroom Vacation Villa in Solterra Resort
2015 Rental Revenue - $45,106.40
15% to Management for bookings + 12% Sales and Hotel Tax = $33,552.00
Expenses
- Electric - average $380 per month = $4,560 per year
- Water - average $150 per month = $1,800>
- Cable TV - included in HOA fees
- Wireless Internet and phone- $70 per month = $840
- Management Fee - $275 per month = $3,300 per year -includes management, pool cleaning, pest control
- Cleanings - 40 cleaning @ $110 = $4,400
- Property Insurance = $1,500
- Taxes - $7,500 includes CDD fees
- HOA Fees - $2,000 per year
Total Operating Costs = $25,900.00
Total Net Revenue = $ 7,652 per year
The net revenue generated in each of these cases was dependent on the fact that a property management company set the rental fees. If you had the desire and ability to generate your own bookings, you could increase your Total Net Revenue.
Contact Team Donovan today at 407-705-2616 for more information, or to purchase your Orlando vacation home.Â
Posted by Team Donovan on