When you are looking to buy a vacation home in the Disney Catchment area you will come across term Orlando Short Term Rental zones (STR) prior to buying a property. Those that haven’t could be in for a nasty surprise.
What many people consider to be the Disney, Orlando area actually consists of 4 different counties in Central Florida. They are Lake, Polk, Osceola and Orange Counties.
Where are the Orlando short term rental zones?
Polk County and Osceola County are the most short term rental friendly whilst Lake and Orange mostly consist of residential and commercial zones.
Even though a County may permit short term rentals, the community will also have to agree that they are a short term rental community. This is usually stipulated by the developer of the community at the time of construction.
In general the areas directly south and west of Disney are Orlando Short Term Rental Zones. There are a number of exceptions and you may find some communities in this region are NOT Short Term Rental. You may also discover some Short Term Rental communities outside of this immediate area.
Vacation home communities in Orlando short term rental zones
Most homes in Florida are zoned as residential or (R-1). This means that the home is for residential purposes and ‘subject to’ the community association agreeing it could be rented out for Long Term Rental (LTR). Some ‘Deed restricted’ communities may not agree that owners can rent out their property even for Long Term Rental.
What is a Short Term Rental?
Short term rentals are defined as being permitted to be rented for periods of less than 6 months. Anything over a 6 month and 1 day period is classed as a LTR.
Once you have purchased your vacation home within one of the Orlando short term rental zones, you will need to apply for operating licenses. You will need a business license and a tourism tax license from the county where you property is located. These licenses are absolutely required in order to rent out your property for short term rentals. Not having a license can subject the owner to fines of $250 per day for non-compliance.
Essentially the licenses permit you to operate your vacation home as a small hotel. The annual licenses are inexpensive and are only issued to owners of vacation homes that are legally permitted to offer short term rentals within compliant short term rental communities. The management company you employ can apply for these licenses on your behalf.
Why should I buy in the Orlando Short Term Rental zones?
The most common reason to buy a property within short term rental zones is because you are looking to buy a vacation home near Disney, which you wish to rent our when you are not using it yourself.
When buying short term rental properties you have the possibility to rent the vacation home out when you are not there. These rentals can provide you with a cash flow which can cover or go towards the cost of ownership and the annual running expenses.
If you are looking for an investment with solid cash flow and a hands off approach then you probably should be buying vacation homes in Orlando short term rental zones.
Rental demand for vacation homes is very high and you should achieve good occupancy levels if the property is correctly purchased and suitable to its needs.
Management and Bookings
Management and bookings are not the same thing and many times are not done by the same people.
- A management company will take care of your property and your guests.
- A booking company will market your property and get bookings.
Very few management companies are able to book all of the vacation properties weeks on their own. They utilize booking companies to fill weeks which they themselves cannot. An experienced management company will have an excellent network of booking companies who will assist in selling the accommodation.
Pro-active owners of short term rental vacation homes will often market their own property. They do this in their home country or state or just online and assist in generating paid bookings. By creating their own bookings they get to save on booking fees and commissions.
Many management companies discuss their high occupancy rates but are unwilling to discuss profitability of the owners. This can be because they rent out the properties at discount in order to achieve high occupancy. Sometimes they count even weeks used by the owner, as rented. Being occupied is NOT the same as being rented!
New models for bigger families
Many of the short term rental vacation homes within the Orlando short term rental zones currently being constructed have oversized floor plans. They feature up to 14 bedrooms, which is very different from the 4, 5 and 6 bedrooms we have been used to seeing.
Make sure that the property you are going to buy is rent-able and in one of the Orlando short term rental zones.
Many of our clients ask us which type of property rents out the best. Based on 30 years if experience 4-6 bedroom properties have always done well. These newer large properties could do as well or even better, but as of today they have no history.
We do know that traditional sized properties rent well and there is little reason to believe this will change. Perhaps we err on the conservative side but our clients are currently renting 40-42 weeks each year. Why should we rock the boat now?
Getting it wrong because you received poor advice
In a recent discussion with a property manager, they mentioned a client who had bought an 8 bedroom vacation home. The property was beautiful, the landscaping fantastic yet the property manager had a problem with the home.
They said that the pool was too small and the living space, which did not flow correctly, was just too small. It was going to be difficult to rent out and achieve anywhere close to the weekly rental the new owner had been told by the realtor.
The owner had shopped around for a property manager after they had purchased the property, trying to get the best deal. It seems the only one who got a deal was the realtor.
Getting it right for the right reasons
If you genuinely need to purchase an 8 bedroom property or even something larger, of course we are going to help you buy one. We are in the business of helping you! We will always make sure that you understand what you are buying before you buy it.
A vacation home is a lifestyle investment as much as it is a financial investment. It should work for you on both of these levels.
Well congratulations for getting this far.
It seems that you like to perform plenty of research before you make a move! In order to help you a little more, we have prepared a Buyer Guide for you to read.
Orlando Buyers Guide
Our Orlando Buyers Guide provides with a crucial insight into buying a vacation home in Orlando. It is a straightforward process. It may differ from how you would purchase a property in your home state or country but it’s still simple.
First of all you need to forget about school districts and commutes to work. You need to replace them with Short Term Rental Zones and commutes to attractions. These two things are your starting point.
If the attractions are too far away or the community is not a designated short term rental community, then everything else is a moot point. That includes the price, the model and the community amenities.
Distance is just one of the relevant factors which you need to consider when purchasing a vacation home in Orlando, especially when you plan to rent it out to tourists.
Being Close to Disney
The majority of tourists will want to be within a few miles of Disney because this is the focal point for family vacations. Both purchase and rental prices the closest to Disney tend to be higher than elsewhere. Just because they are higher doesn’t make a community in this area the best choice for you.
Some of the best performing rental communities are a few minutes further away from the theme parks than you would expect. Their owners get excellent rental occupancy and higher rental returns after expenses have been deducted.
Read more in our Orlando Buyers Guide
Our Orlando Buyers Guide explains not only how the buying process works and what to expect. Plus the things that you will need to take into consideration before you place a deposit on your new Orlando vacation home.
- The Buying Process
- Representation, Using a Realtor & MLS
- Short Term Rental Zones
- Occupancy Rates
- Resale vs New Homes
- Your Dream Home May Not Be What You Should Be Buying
- Determining What You Want From Your Property
- Negotiations, Reservations & Deposits
- Cash of Finance
- Closing On Your Property
- After Closing
- Property Management & Rental Bookings
- Property Taxes, Income Tax & Accountants
Our guide is specifically aimed at vacation homes and not residential purchases. Some of the details in our guide are common knowledge. Other sections, however, are based on our +30 years of experience in this niche market.