Are Short-Term Vacation Rentals Still Good Investments in Central Florida?

Q: I’m considering investing in a short-term or vacation rental in Central Florida. Are these still good investments?

A: They can be, but there’s a lot of competition and location is important. A Disney-area rental may no longer be a great opportunity, but a rental property serving visitors coming for work or events might be. Success depends on buying in a location with steady demand, limited competition and rules that allow short stays.

Tourism in Central Florida is stronger than ever, but Orlando, Kissimmee and Davenport already have thousands of vacation rentals. Investing in those markets requires competing on price, amenities, photographs and reviews. Less-saturated communities can offer better opportunity if they attract business travelers, reunion-goers, wedding guests, event attendees or people relocating to the area.

For example, Sanford is worth exploring because of its historic downtown, Lake Monroe waterfront, airport, Auto Train station and access to I-4 and the 417. Visitors may also use Sanford as a base for trips to Orlando, Daytona Beach and the Space Coast. Places near hospitals, universities, airports and employment centers are also worth exploring. Areas around Lake Mary, Altamonte Springs and Oviedo can attract corporate, medical, educational and family-related travel. In some locations, a furnished mid-term rental of 30 days or longer may be easier to operate than a traditional vacation rental.

Orange County has particular rules and restrictions. Unincorporated residential areas generally restrict short-term rentals to certain zoning classifications or approved developments. Inside the City of Orlando, home sharing is allowed if you live on-site and you’re there when guests are staying. Short-term rental of the whole house is not allowed. Winter Park and Maitland have their own rules.

Seminole County has a vacation-rental registration process for qualifying properties in unincorporated areas, but incorporated cities may have their own zoning and licensing rules. Also, HOA and condominium restrictions may prohibit short stays even when local government rules allow them.

Many other factors affect the return, but your first questions should be 1) can the property legally operate and 2) will enough guests want to stay there. A great Realtor® can help you find the answers to both those questions.

Sources: Orange County Zoning Division; City of Orlando Home Sharing Registration; Seminole County Vacation Rental Registration Requirements; City of Sanford Land Development Regulations.