Orlando’s booming tourism industry makes it a prime location for short-term rental investments. At Global Florida Realty, we’ve seen a surge in interest from investors looking to capitalize on this lucrative market.
Buying short-term rental property in Orlando can be a smart financial move, but it requires careful planning and local expertise. This guide will walk you through the essential steps to make your investment a success.
Where Are Orlando’s Best Short-Term Rental Areas?
Prime Locations for Vacation Rentals
Orlando’s short-term rental market thrives, with several neighborhoods offering excellent investment opportunities. Kissimmee stands out as a top choice, known as the Vacation Home Capital of the World. It boasts 1,862 qualifying Airbnbs (as of December 2024), with properties enjoying an average occupancy rate of 47% over the past 12 months and a year-over-year growth in Airbnbs of 72%.
ChampionsGate and Reunion Resort also attract vacation home investors. These communities offer spacious properties with private pools and resort-style amenities, which tourists visiting Orlando’s attractions highly value.
Tourism Trends and Visitor Statistics
Orlando’s tourism industry remains robust, attracting 74,009,000 visitors in 2023, with 67,879,000 domestic and 6,130,000 international visitors. This statistic cements Orlando’s position as America’s most-visited destination, highlighting the immense potential for short-term rental investments.
The city’s appeal extends beyond its world-famous theme parks. Year-round events ensure a steady stream of visitors, contributing to the sustained demand for short-term accommodations.
Navigating Local Regulations
Understanding Orlando’s short-term rental regulations is essential for investors. The city allows two categories of rentals: Homeshare and Commercial Dwelling Unit, each with distinct rules.
Homeshare rentals receive permission in all residential zones but require the homeowner’s presence. For entire property rentals, investors must obtain a short-term property rental permit (initial fee: $275, annual renewals: $100).
Florida law mandates a vacation rental business license for properties rented more than three times a year for periods of 30 days or less. Compliance with these regulations prevents potential fines and operational challenges.
Strategic Property Selection
Location plays a paramount role in property selection. Areas within a 15-20 minute drive from Disney World attract vacationers. Windsor Hills, located just two miles from Disney, offers excellent investment potential due to its proximity and extensive amenities.
Investors should use resources like the interactive zoning maps on Orlando.gov to understand property regulations and zoning designations. This information proves invaluable when choosing a property that aligns with short-term rental regulations.
Amenities That Boost Rental Appeal
To maximize your investment’s potential, focus on properties with features that vacationers desire. Private pools, game rooms, and outdoor seating areas top the list of sought-after amenities. Properties with Disney-themed decor or furnishings can enhance the vacation experience for guests and boost rental appeal.
Family-oriented features (such as cribs, highchairs, and childproofing) attract renters with young children. Well-equipped kitchens and spacious living areas also increase a property’s desirability.
As we move forward, we’ll explore the specific features that make a short-term rental property successful in Orlando’s competitive market.
What Makes a Successful Short-Term Rental Property?
Location: The Prime Factor
The success of a short-term rental in Orlando hinges on its location. Proximity to Walt Disney World is key to attracting vacation renters to your rental property. Consider properties within a reasonable distance from the park to maximize your rental potential.
However, proximity to other attractions also matters. Properties near Universal Studios or SeaWorld draw a steady stream of guests. Visit Orlando reports that these parks attracted millions of visitors in 2023, creating a constant demand for nearby accommodations.
Amenities That Elevate the Experience
To excel in Orlando’s competitive market, a property must offer amenities that enhance the vacation experience. Private pools top the list of must-have features, with data indicating that listings with pools command up to 20% higher nightly rates.
Game rooms equipped with pool tables, foosball, or video game consoles appeal greatly to families and groups of friends. Outdoor living spaces, such as patios with grills, add significant value to the rental property.
Tech-savvy travelers appreciate smart home features. Properties with high-speed Wi-Fi, smart TVs, and keyless entry systems often receive better reviews and repeat bookings.
Size and Layout Considerations
The ideal property size depends on the target market. Families often seek homes with 3-5 bedrooms to accommodate multiple generations or groups of friends.
Open floor plans allow for communal spaces where guests can gather. A well-equipped kitchen enables vacationers to prepare meals at “home,” saving on dining out expenses.
Multiple bathrooms (particularly en-suite) reduce morning congestion and make the stay more comfortable for larger groups.
Balancing Attraction Proximity and Tranquility
While closeness to attractions remains important, some guests prefer a quieter setting. Properties within 9 mi (15 km) of attractions like ChampionsGate Golf Club, Green Meadows Petting Farm, and Providence Golf Club can offer a balance between accessibility and tranquility.
These gated communities often feature additional perks (such as golf courses, water parks, or on-site restaurants), which can justify higher nightly rates and attract a more upscale clientele.
Accessibility and Quality Furnishings
Properties with easy access for guests arriving by car or shuttle have an advantage. Ample parking proves essential, especially for larger homes that may host multiple families. Garages or covered parking add value, particularly during Florida’s rainy season.
High-quality, durable furnishings significantly impact guest satisfaction and property longevity. Comfortable beds often feature prominently in guest reviews. Furniture should be both attractive and able to withstand frequent use.
As we move forward, we’ll explore the financial aspects of investing in Orlando’s short-term rental market, including financing options and strategies to maximize your return on investment.
Financing Your Orlando Vacation Rental
Traditional Mortgage Options
Conventional loans remain a popular choice for financing vacation rentals in Orlando. These loans typically require a down payment of 20-25% for investment properties. Lenders will scrutinize your credit score, income, and debt-to-income ratio when considering your application. While these loans offer competitive interest rates, they often have stricter requirements for investment properties compared to primary residences.
Alternative Financing Solutions
For investors seeking more flexibility, portfolio lenders or private money lenders might offer better terms. These lenders focus more on the property’s potential income rather than your personal income, which can benefit investors with multiple properties. Another option gaining popularity is the DSCR (Debt Service Coverage Ratio) loan. This loan type bases approval on the property’s ability to generate income, making it an attractive option for Orlando’s thriving short-term rental market.
Return on Investment Calculations
To determine your potential return on investment (ROI), you must consider all aspects of owning a vacation rental. This includes the purchase price, renovation costs, furnishings, and ongoing expenses (property management, utilities, and maintenance). On the revenue side, Orlando’s short-term rental market shows promising figures. Recent trends indicate stabilizing occupancy rates and positive rate growth, with improving unit-level performance.
Tax Advantages for Vacation Rental Owners
Owning a vacation rental in Orlando comes with several tax benefits. You can deduct expenses related to managing and maintaining the property (property management fees, cleaning costs, and repairs). The depreciation deduction is another significant advantage. The IRS allows you to depreciate residential rental properties over 27.5 years, which can substantially reduce your taxable income. Florida’s lack of state income tax further enhances the investment appeal, as you’ll only pay federal taxes on your rental income.
Professional Property Management
While not directly related to financing, effective property management can significantly impact your investment’s financial performance. Professional management companies in Orlando can handle everything from guest communications and check-ins to maintenance and cleaning, allowing you to own a vacation rental property without the day-to-day responsibilities of a hands-on landlord. Top-rated companies in the area include Pleasant Stays and Central Florida Property Management.
Final Thoughts
Buying short-term rental property in Orlando offers a lucrative investment opportunity in a thriving tourism market. The city’s enduring appeal, world-famous attractions, and year-round events provide a solid foundation for strong returns. Investors must consider location, property features, and financial strategies to succeed in this competitive landscape.
Thorough research on Orlando’s regulations, zoning laws, and neighborhood requirements is essential for making informed decisions. Properties near major attractions, especially within a short drive from Disney World, often perform exceptionally well. Amenities such as private pools and family-friendly features can significantly enhance a property’s appeal and rental potential.
At Global Florida Realty, we specialize in helping investors navigate Orlando’s short-term rental market. Our comprehensive services include property management and investment guidance to streamline the process of buying and operating a successful vacation rental. The long-term outlook for Orlando’s rental market remains positive, with stable occupancy rates and growth projected for the foreseeable future.
