Tips for Buying a Vacation Home Investment in Orlando

This is a guest post by Mike Chen, owner of FunStay Homes, a property management company. 

Once upon a time, in a faraway land, a young prince lived in a shining castle … oops wait a minute, different story …

Let’s try this again.

Our Disney journey dates back to the spring of 2017 when my family and I visited Disney World, Florida for the first time. Let’s just say, I won father of the year in 2017. It all started when my kids told me after they visited Magic Kingdom, “Daddy, this is the best place ever.”

It then dawned on me that I can have an amazing time with my family here, year after year, and create memories to last a lifetime. We had been looking at short-term rental opportunities all over the country but couldn’t really find a place that we could rent year round, one we could feel excited about coming to year after year.

Disney is the land of magic, a place where children’s dreams get fulfilled. If you think I’m joking, ask a random kid where they would like to vacation, and the answer will always be ‘Disney World’. It’s every parent’s dream to take their children to the most magical place on earth. Such memories are the main reason why this place exists. Watching our young ones beam with excitement and joy melts our hearts like nothing else.

The cherry on the cake is that we end up being the heroes for taking our children to Disney World. The trip is worth everything and much more. After a visit to this magical place, many people dream of having a home nearby, a home away from home. This is what triggered my interest in owning a vacation home near Disney. The decision to invest was the perfect choice for us because it checked off all of the boxes:

• Attracts millions of visitors, all year round

• Is an international destination

• My family loves Disney, especially my two little ones

• Affordable homes compared to the national average

• Opportunity to make money

Just two months after our very first visit to Disney World, we made our initial vacation home purchase — a decision that quickly grew into something much bigger. Since then, we’ve successfully acquired ten additional vacation homes across some of the most sought-after resorts in the Orlando area. 

Over the years, our business has evolved to include full-service vacation home management, with properties now located in premier communities such as Windsor Hills, Storey Lake, ChampionsGate, Reunion, Windsor Cay and many others. We are also expanding our property management services to Miami.

Let me help you accomplish your dream of having a vacation home in Orlando by sharing a few successful tips.

1. Analyze the market

Start thinking like a business person. Ask yourself some critical questions:

• How much money can I make on this property by studying comparable homes on booking sites such as Airbnb and Vrbo?

• Who are my competitors?

• What do I have that my competitors don’t have? (What’s your niche?)

• What kind of home should I buy? (condo vs. townhouse vs. single family home).

This is how I started before I purchased my first rental property. I studied several similar homes before purchasing one. Always study the homes that are successful because this is how you can learn to make your property better, and learn from the top hosts.

2. Location

The location aspect is very important. Disney World is big and so is Orlando. Knowledge is key! Gain as much insight as you can regarding the perfect location for your investment. This will involve interviewing several real estate experts and agents in the area before settling with the best. 

An ideal agent, in this case, is one who has also invested in short-term rentals. They can guide you through not just the purchasing process but also all the key components that will make your home successful in the long term. 

You need to ask yourself a few questions first by putting yourself in the shoes of a guest taking their kids to Disney for a week:

• Are they looking for a home that is close to Disney World?

• What amenities are attractive and important on vacation?

• Would they prefer a home with a pool or a home in a resort setting with a pool, lazy river, etc?

• What kind of property would they book near Disney World?

• What’s their budget for a week’s stay?

3. Budget

Budget is the aspect that will distinguish your vacation home from other properties near Disney World. You need to establish a niche in the industry that will give you a competitive advantage and make guests comfortable with your pricing. The most important question when making a budget is how much you are able or willing to invest in the kind of property you want.

Before settling on a budget, consider the following factors:

• Utilities

• HOA fees

• Property taxes and insurance

• Property management fee (typically about $150/m)

• Booking fees (typically 15%-20% of gross revenue)

• Cost of furnishing the home (if purchasing an unfurnished home)

• Replacement and updating costs such as A/C, pool heating, theming, etc (if purchasing an older home that has not been updated recently)

My best recommendation is to start with the budget that you feel comfortable with. I like all the homes I own, and each of them has achieved the financial goals I have set for them.

4. Establish your role

• Do you plan to be actively involved as a host or hand this property to a property management company after purchasing?

• Do you have the time to manage guest inquiries and receive calls from guests 24/7?

If you enjoy guest service and have the time to invest in this business, you should host your guests, i.e. manage the bookings yourself. This is a great way to learn about the industry, save money and add value to your business.