Condos, Townhouses and Pool Homes

There are really two quite distinct vacation rental property markets in Florida. The condo and townhouse market is primarily for smaller two or three (occasionally four) bedroom units, usually with a communal swimming pool, and often with other shared leisure facilities. The single family home market is primarily three to seven bedrooms, and nearly always with a private pool. There is some overlap, but the markets are for the most part distinct. This means that you have to decide which market you want to be in.

The trend towards resort-style communities with many additional features is worth a mention, if only to point out that the advantages of buying in these locations is likely to be at least partly offset by the substantial homeowners association fees needed to cover the cost of maintaining the communal areas. A high profile resort style community is most likely going to be easier to rent out that a similar property on a mixed residential use community further away from the 'action'.

Number of Bedrooms

The next question must be, do you intend to use the home for your own vacations? If so, what do you need? Your requirements must take priority over any underlying potential for profitability, otherwise you will one day regret your investment (remember, this is your 'second home'). Consider the largest extended-family group you are likely to assemble, and make sure that your home can accommodate it. By all means go larger, if you think that is the best option economically, but never go smaller.

Having got that consideration out of the way, what is the relative advantage of owning a 3-bedroom home as against one with four, five, six or even seven bedrooms? My experience with my own rental bookings web site, eVilla Rentals, provides some important clues. The relative demand for pool homes in the Orlando area based on bedroom number, as measured by the number of enquiries received, is approximately as follows: 55% 3 bedrooms, 20% 4 bedrooms, 25% 5 bedrooms or larger. Despite this, there are a lot more 4-bed short-term rental properties in Central Florida than there are 3-bed. This suggests that a three-bedroom home may often be a better option than a 4-bedroom home. 5 bedroom homes and large (particularly larger) also do well.

Location

Most people put this at the top of their decisions list, but it can be over-rated. Having dealt with owners with properties from the Splendid China/Formosa Gardens area, just a couple of minutes from Disney, to the Lakeland area, which could not truthfully be described as close to Disney, I have come to believe that location is not the most important consideration. If you are further away from Disney, you are probably closer to either the coast or the airport, and perhaps in a more peaceful, relaxing area.

The closer to Disney you get, the more expensive are the properties. This means you have to aim for a higher rental rate on location alone, and this cannot always be achieved. Almost every visitor wants to be close to Disney, but if you ask a tourist how he would define close to Disney, many would say within a 15 to 20 minute drive. Since there are very few rental homes in Central Orlando that are outside this range, it is easy to see how the location factor can be over-played.