Maybe you’ve been studying through Airbnb Kissimmee real estate listings on real estate investment platforms such as Mashvisor and realized the expected returns are relatively high. For instance, any beginner or skilled rental property investor would undoubtedly be intrigued by a Kissimmee single-family home offering a 15% cash on cash return.
According to USA Today, home prices are climbing early this year, making it increasingly difficult for real estate investors to locate outstanding offers. Hence, selecting an investment property to generate a profit is more critical than ever. In addition, if you are investing in a short-term rental property, you must ensure that it will create a profit.
Before you jump into Kissimmee real estate market, it’s a smart idea to conduct some research on the local housing market’s present status in 2022. So, is now a good time for Airbnb Kissimmee investment? Let’s see what this year holds for us.
Florida Real Estate Market: The Current Trends
Here are three compelling reasons why investing in Airbnb Florida housing market 2022 is a wise decision.
1. Higher Rental Income
A good Airbnb rental with a high occupancy rate is typically more profitable than leasing the same house to a long-term tenant. Rent is charged on a nightly basis when you invest in this sort of rental property investment. Depending on the season, you may even be able to raise your nightly rate in order to generate more cash from Airbnb.
2. Tax Deductions
In your status as the owner of a vacation home that you rent out on Airbnb, you are entitled to deduct the costs associated with the upkeep and maintenance of your investment property. Charges such as occupancy taxes, consumables, cleaning prices, utilities, and hosting fees are included in this category.
3. A Private Resort Location
Purchasing a vacation rental property provides you with a place to relax with your friends or family. Along with saving money on housing, you get to enjoy your vacation time in the luxury of your own second home. And when it comes to trips, Florida is unquestionably one of the top home markets in the United States.
What to Consider When Opting for Airbnb Kissimmee
Florida is the third most populated state in the United States. Airbnb Florida tends to attract millions of tourists each year with its beautiful beaches, a stable climate, and diverse range of entertainment. The Kennedy Space Center, Disney World, Universal Studios, Clearwater Beach, The Ringling, SeaWorld Orlando, and the Salvador Dali Museum are all popular places in the state.
Florida is one of the most Airbnb-friendly states in the United States regarding short-term rental laws. Currently, local governments are not permitted to implement laws prohibiting Florida vacation houses. Nonetheless, before purchasing homes in Florida to rent them out on Airbnb or similar platforms, make sure to check local authority websites for updates on any regulatory changes.
According to the Business Journals, 59 million travelers visited Florida in the first half of 2021. However, the numbers are predicted to considerably increase in 2022, resulting in a massive Airbnb demand.
According to Realtor.com, the Airbnb Kissimmee FL market’s median list price in December 2021 was $389,000. So naturally, growing home prices have been generating headlines in real estate media for some time. Thus, locating a real estate market where you can save a lot of money while purchasing an investment property for sale is relatively tricky.
As per the location report that Mashvisor conducted in January of 2022, the median property price is $408,230. So we are talking about a rising cost since the last year.
To obtain a vacation home loan for the goal of purchasing a home in Florida, you may explore a cash-out refinance, a home equity line of credit (HELOC), private lenders, or real estate partnerships. However, bear in mind that most lenders require a greater down payment and a higher credit rating. Additionally, vacation house interest rates are often greater than those imposed on primary homes.
Here is a quick summary of relevant housing and Airbnb data for Airbnb Kissimmee, Florida, as of January 2022:
- Airbnb Rental Income: $1,770.49
- Airbnb Cash on Cash Return: 1.11%
- Airbnb Daily Rate: $177
- Airbnb Occupancy Rate: 36.36%
- Median Property Price: $
- Average Price per Square Foot: $408,230
- Days on Market: 44
- Walk Score: 65
This month has been particularly difficult for the average Airbnb Kissimmee host. That is because the COVID-19 Omicron version has been causing havoc with travel patterns worldwide. However, when we examined the statistics from 2021, we discovered that these short-term rentals had:
- Monthly rental income from Airbnb was as high as $2,059 on average (July 2021)
- Kissimmee has been named the third-best post-pandemic travel destination for 2021
We anticipate that Airbnbs in this area will recover and earn at least this much in 2022, once the Omicron surge has calmed. More overseas visitors will rent vacation properties. They’d like to feel at home while taking advantage of hotel-like services. That will assist them to have fewer encounters with other people.
Airbnb Is Legal in Kissimmee
Florida’s real estate market is well-known for being Airbnb-friendly. And there is a compelling reason to invest in Kissimmee real estate now if you consider purchasing an Airbnb property. Furthermore, if you research Airbnb restrictions in the US housing market, you’ll discover that many other places prohibit the use of investment houses as short-term rentals. On the other hand, Airbnb Kissimmee regulations let real estate investors lease their residences to short-term visitors.
Nevertheless, if you do intend to manage an Airbnb Kissimmee, do your research on local legislation. For instance, Kissimmee’s Airbnb rules include zoning laws. Short-term rentals are permitted only in short-term rental overlay areas in designated zones. Additionally, owners will be required to obtain a lodging license, comply with specific health and safety regulations, and pay taxes on their short-term rental facilities, among other obligations.
How to Choose the Best Airbnb Kissimmee Property
Overall, owning a rental property is one of the best investments you can make since it is one of the safer types of investments with high-profit potential. When it comes to owning a rental income property, real estate investors and landlords employ two distinct tactics for profiting from real estate:
- Traditional long-term rental properties
- Airbnb or short-term rental properties
As their title suggests, traditional rentals are often rented on a monthly or annual basis and are the most prevalent type of revenue property throughout the United States. On the other hand, short-term income homes are rented daily or weekly to guests seeking a brief stay, which typically includes tourists, corporate clients, vacationists, and so on.
Here we are focusing on the Airbnb properties. The following is a step-by-step approach to locating the greatest Airbnb Kissimmee opportunity.
1. Choose the Most Suitable Property Type
The location determines which home type is suitable for Airbnb in a particular area. For instance, in business areas with a high volume of business travelers, Airbnb flats and condos are likely to receive more reservations. Meanwhile, tiny communities would have rental housing consisting entirely of single-family houses.
Additionally, the number of bedrooms and bathrooms will influence the type of visitors you welcome. For example, single visitors and couples are certain to book studio apartments or one-bedroom Airbnbs. Alternatively, families or groups of friends traveling together would rent a two- or three-bedroom property.
If you’re unsure which property type is best in Kissimmee; we recommend utilizing Mashvisor’s Neighborhood Analytics tool. Our AI analyzes data from short-term rental sites such as Airbnb to determine the ideal home type, bedroom count, and platform for the location.
2. Determine Your Budget
The more you spend, the harder it may be to obtain a good return on investment and maintain a positive cash flow. Therefore, it is critical to establish a budget within your capabilities and does not put you at risk of defaulting on your mortgage.
When determining your budgeting, keep in mind that you must include more than just the selling price; you must also account for the following fees you will incur prior to listing your rental.
- Closing costs: These are the costs associated with finalizing the sale. It is typically 2% of the selling price.
- Restoration and remodeling: While the actual cost may vary depending on the condition of the home, you should establish a maximum budget for it so that you can incorporate it into your decision.
- Furnishings: The quantity also depends on your comfort level, though you may wish to hire a designer to assist you.
- Registration of a business: This covers any fees associated with obtaining a vacation rental license.
- Additional upfront expenses: You may require a few bookings to begin. These could include the cost of employing property management and advertising.
3. Begin Your Search
Employ a variety of sources when searching for an investment property, including numerous web listings, local newspapers, and your investing network. Additionally, be willing to purchase a foreclosure, real estate owned, or off-market home to boost your chances of landing a rare offer.
Additionally, keep your budget in mind as you browse. You may find yourself enticed to purchase a house out of your price range. If this ever occurs, keep in mind that you are purchasing a rental property to earn from, not to live in.
4. Carry Out an Extensive Analysis
Upon discovering a few residences that fit your budget and catch your interest, it’s time to choose the one you’ll purchase. The most effective approach to accomplish this is to undertake a comparative market analysis.
You will examine houses comparable to the one you are evaluating, are located in the same neighborhood, and were recently sold. Determine their ultimate selling prices and include the difference between them and the price of the house you are contemplating.
A comparative market analysis can assist you in determining the fair market value of a property for sale, ensuring that you do not overspend. In addition, it will help you in calculating your returns.
To calculate your Airbnb rental income, you must first evaluate your Airbnb’s daily pricing and occupancy rate. Then, using these figures, determine your monthly rental income and multiply it by twelve to obtain the total for the year. Finally, subtract the one-time and monthly costs (multiplied by twelve) associated with your Airbnb activities from your yearly Airbnb income property.
The given will assist you in determining your cash flow during the first year. After a few years, if you continue to calculate this, you will arrive at your complete real estate investing payback. Additionally, you should determine your cap rate, which is equal to your net operating income divided by the property’s initial value.
While a cap rate of 10% would be desirable, a range of 5% to 9% is acceptable. Determining these, on the other hand, might become difficult. You’d be advised to use an Airbnb calculator. After reviewing your selected properties, you should already determine which one to purchase based on the cap rate and potentially other variables. Once you’ve made a decision, you can make an offer and initiate the deal.
Try out our Airbnb property calculator and find the easiest way to your short term rental strategy!
Conclusion
Although real estate investing is intended to provide passive income, the first stages always require a significant investment of time and effort. And if you’re not cautious, you could end up making a calculation error that results in a considerable loss.
To control the risks, try employing a real estate investment tool that assists you in finding homes and gives accurate analysis based on data acquired from reputable sources. Mashvisor is an excellent demonstration of this.
Including both novice and skilled real estate investors in mind, we built a website that would act as your go-to tool for locating profitable investment properties. It also has a low or no period of adjustment, and you may complete your search and analysis in as little as a couple of hours without leaving your house.