Investing in Orlando Real Estate: The Real Deal

A few things come to mind when you think of Orlando, A.K.A. The City Beautiful. You might think of close beaches, Florida weather, and, who could forget, Disney World. Here’s something that you may not know about the city: Orlando has been among the top cities to invest in real estate, time and time again. Most recently, in July 2016, it was the second best city in the country for real estate investment.

Whether you plan on investing in Orlando real estate traditionally or through Airbnb, you’re in for a lucrative investment. Different reasons factor in for each method, as we will discuss.

Investing in Orlando Real Estate – Airbnb

Reason: World-Class Tourist Destination

Two words: Disney World. That’s all you the reason you need to invest in Airbnb in Orlando. But it’s definitely not all Orlando has to offer for tourists. The city hosts 7 of the 10 most visited theme parks in North America, and 5 of the top 10 worldwide. With Disney World, SeaWorld Orlando, and Universal Orlando Resort, the city deserves its respectful title as the ‘Theme Park Capital of the World”.

Orlando’s tourism industry is simply top-notch and record-breaking. In 2015, over 66 million people, from the country and around the world, visited the city. This made it the first and only city to have over 60 million tourists. The tourism industry has been a driving force in Orlando’s economy. It was recorded in 2013 that tourists spent a breathtaking $33 billion in the city. It’s safe to say you won’t be short of potential Airbnb guests and profit.

But…there’s a catch

Orlando is no stranger to Airbnb. In 2015, over 100,000 people visited Orlando through Airbnb. Unfortunately, however, there has been some controversy by investing in Orlando real estate through Airbnb.

There have been a couple of instances in which Airbnb has caught some flak from the city. In the two situations, Airbnb rentals were violating county zoning rules. Some neighborhoods are zoned for short-term rentals while others are not. If you plan on investing in Orlando real estate through Airbnb, make sure your neighborhood permits it.

Aside from zoning issues, there aren’t common Airbnb issues in Orlando. For an overview of Airbnb implications in Orlando, directly from Airbnb itself, click here.

Airbnb’s legal situation in Orlando shouldn’t be discouraging. You don’t want to miss out on such a profitable opportunity. Just be sure that your neighborhood is qualified for short-term rentals. Consult a legal advisor for more help. With that being said, let’s show you where to have an Airbnb rental in Orlando.

Top 5 Neighborhoods for Airbnb Orlando

1.) College Park

Median Price: $349,000
Airbnb Rental Income: $2,190
Airbnb Cash on Cash Return: 4.16%
Airbnb Cap Rate: 7.58%
Airbnb Occupancy Rate: 45%

2.) Wadeview Park

Median Price: $334,700
Airbnb Rental Income: $2,076
Airbnb Cash on Cash Return: 4.12%
Airbnb Cap Rate: 7.55%
Airbnb Occupancy Rate: 56%

3.) Ventura

Median Price: $89,500
Airbnb Rental Income: $1,181
Airbnb Cash on Cash Return: 7.03%
Airbnb Cap Rate: 12.44%
Airbnb Occupancy Rate: 46%

4.) Metro West

Median Price: $159,450
Airbnb Rental Income: $1,917
Airbnb Cash on Cash Return: 7.89%
Airbnb Cap Rate: 12.68%
Airbnb Occupancy Rate: 50%

5.) Milenia

Median Price: $134,950
Airbnb Rental Income: $1,402
Airbnb Cash on Cash Return: 6.87%
Airbnb Cap Rate: 11.67%
Airbnb Occupancy Rate: 43.4%

The cap rates and cash on cash returns in this blog are averages, yours will likely be higher.

Investing in Orlando Real Estate – Traditional

Orlando isn’t just a spectacular city to visit, it’s also a great city to live in. Here’s why you should go traditional in Orlando.

Reason #1 – More Jobs = More People = More Tenants

It’s a simple equation that holds true, especially for Orlando. A recent survey named Orlando as the top metro city to invest in real estate primarily due to growth. The city’s year-to-year population growth was near 3%. Jobs grew as well, at 4.5% annually. Orlando’s tech industry has risen and made a name for itself. Adding to the strong job market, over 150 international companies have stations in Orlando. Population and job growth plus a relatively low cost of living attract many to live in the city, a good reason to start investing in Orlando real estate.

Reason #2 – Cheaper Homes, Higher Returns

These are another two benefits of investing in Orlando real estate. Orlando investors received an impressive 14.9% in overall returns in the past year. This high return percentage was due to above average rental prices in the city, again, something investors take advantage of. Orlando also has relatively low home prices compared to the national level. The average home price in the city is a little over $200,000. The national average for the past year has hovered around $350,000. You get the idea.

Top 5 Neighborhoods for Investing in Orlando Real Estate Traditionally

1.) Baldwin Park

Median Price: $411,000
Traditional Rental Income: $2,547
Traditional Cash on Cash Return: 3.62%
Traditional Cap Rate: 6.83%

2.) Ventura

Median Price: $89,500
Traditional Rental Income: $1,122
Traditional Cash on Cash Return: 6.44%
Traditional Cap Rate: 11.81%

3.) Florida Center

Median Price: $319,5000
Traditional Rental Income: $1,946
Traditional Cash on Cash Return: 3.96%
Traditional Cap Rate: 7.47%

4.) Central Business District

Median Price: $209,000
Traditional Rental Income: $1,541
Traditional Cash on Cash Return: 3.4%
Traditional Cap Rate: 7.13%

5.) Conway

Median Price: $214,200
Traditional Rental Income: $1,312
Traditional Cash on Cash Return: 4.08%
Traditional Cap Rate: 8.28%

All in all,

Investing in Orlando real estate is more than just investing in your ordinary city. As an elite leader in global tourism and a vibrant economical city, you can’t go wrong by investing traditionally or through Airbnb.

To get started in investing in Orlando real estate, and in other U.S. markets, start your trial at Mashvisor.

Start Your Investment Property Search!