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Rental Arbitrage in Orlando: Everything You Should Know

Rental Arbitrage in Orlando: Everything You Should Know

You don't have to own property to become a successful host on popular online travel agencies (OTAs) like Airbnb, especially in a sought-after destination like Orlando, Florida.

If you're dreaming of becoming an Airbnb host but aren't ready or willing to purchase property, rental arbitrage is a promising path for you.

This guide explains how you can leverage this low investment, low risk business strategy to start hosting in Orlando without a substantial down payment.

Rental Arbitrage: A Low Investment, High Reward Strategy

Rental arbitrage is the trend of being able to rent properties only to then sub-lease them as short-term vacation rentals.

Basically, it is renting a property to rent out short-term — often on platforms like Airbnb. This strategy can be a very lucrative one in places of high tourist turnout, where the demand for vacation rentals is much higher than supply.

For those looking to dive into the short-term rental market without the cost of purchasing property, rental arbitrage is an attractive option. It offers the flexibility to capitalize on the lucrative holiday seasons and events that Orlando is famous for, without the long-term commitment of property ownership.

However, successful rental arbitrage hinges on a deep understanding of local market dynamics, regulations, the legal landscape, and the effective property management.

Why Choose Orlando, Florida for Your Airbnb Venture?

Why Choose Orlando, Florida for Your Airbnb Venture?

Orlando, a city celebrated for its array of attractions, has become a hotspot in the vacation rental industry. Known for world-class theme parks like Universal Orlando, Walt Disney World and SeaWorld, Orlando is not just a hub for family entertainment but also offers excellent shopping, vibrant nightlife, top-notch golf courses and picturesque boat rides in local swamps.

These attractions make Orlando a prime destination for visitors from all over the US and the world, creating ample opportunities for rental arbitrage and vacation rentals.

Orlando, a city celebrated for its array of attractions, has become a hotspot in the vacation rental industry. Known for world-class theme parks like Universal Orlando, Walt Disney World and SeaWorld Orlando is not just a hub for family entertainment but also offers excellent shopping, vibrant nightlife, top-notch golf courses and picturesque boat rides in local swamps.

These attractions make Orlando a prime destination for visitors from all over the US and the world, creating ample opportunities for rental arbitrage and vacation rentals.

By starting your Airbnb business in Orlando you can tap into a steady stream of tourists looking for unique lodging experiences.

Getting Started with Rental Arbitrage in Orlando

To get started with rental arbitrage in Orlando you need to understand the local market, find the right property, negotiate with landlords and create an enticing listing on OTAs. This process might seem daunting, but with the right strategy and dedication, it can be highly rewarding.

Looking at Orlando's Vacation Rental Industry Trends

According to data from AirDNA the Orlando vacation rental market has witnessed significant growth post-pandemic. Key metrics indicating this upsurge include:

  • A remarkable increase in average daily rates, rising by 3% from last year to $220.
  • A surge in occupancy rates, with 77% occupancy reported in December 2023.
  • A substantial rise in annual revenue, increasing by 16% since 2022 to $49,700 in 2023.
  • AirDNA rates Orlando 95 out of 100 on market performance.

These figures not only demonstrate a recovering industry but also highlight Orlando's robust market for potential vacation rental hosts and investors.

Key Rules, Laws and Taxes in Orlando for Short-term Rentals

Key Rules, Laws and Taxes in Orlando for Short-term Rentals

Navigating the intricate legal and regulatory framework is a critical step in establishing a successful rental arbitrage operation in Orlando. Understanding the nuances of licensing and health and safety regulations is important.

Zoning laws

Orlando's zoning laws play a significant role in determining where short-term rentals can operate. Certain areas are designated specifically for short-term rental activity while others have restrictions or outright bans. Orlando's Official Zoning Map offers detailed insights into these designations.

Vacation rental license

In Florida anyone renting out a property on behalf of the owner is deemed a 'licensed agent' and is required to obtain a vacation rental license from the Department of Business and Professional Regulation (DBPR). There are two main types of licenses relevant:

  • Group license: This covers all units within a single complex or building licensed to a particular agent. It's possible to have multiple group licenses for different agents within the same property.
  • Collective license: Issued for a group of houses or units in different locations but represented by the same agent. Each collective license can include up to 75 units or houses restricted to one district.

Florida law distinguishes between vacation rental condominiums (units within a condominium complex or cooperative) and vacation rental dwellings (single-family houses, townhouses, duplexes, triplexes, etc.). These cannot be combined under the same license.

The license must be renewed annually, displayed at the rental, or presented upon request.

Hosted rental license

For hosts renting out individual rooms rather than the entire unit, a vacation rental license from DBPR is not required. Instead a short-term rental permit from the city of Orlando will do.

Requirements include:

  • Notarized permission from the property owner.
  • The host must be present during bookings.
  • Limit rentals to half of the total bedrooms.
  • Only one booking at a time.

Approval from the HOA is needed if the property is within a mandatory association.

Health & safety regulations:

It is crucial to ensure that your vacation rental meets health and safety standards. As a licensed host, you're responsible for compliance, including:

  • Maintaining clean, well-lit and ventilated halls and entrances.
  • Sanitizing dishes and glassware to public food service standards.
  • Providing a kitchen sink with hot and cold running water.
  • Installing smoke alarms and having a charged, accessible fire extinguisher.
  • Conducting balcony inspections every three years for rentals three stories or higher.

Sticking to these rules isn't just about keeping things legal – it's also about making sure your guests are safe and have a great time.

And let's be honest, a happy guest means positive reviews. Keeping up with these standards is key to building a solid rep and really making your property management business shine.

Stepping into Orlando's Rental Scene: What It Takes to Succeed

Starting out in rental arbitrage in Orlando is pretty exciting but it's not all fun and games – you need to be on the ball, especially with the legal stuff.

It's about getting the right licenses and making sure your place ticks all the boxes for health and safety.

Every step you take is important to build a rental business that's not just good for now but for the long haul. The rental world is always changing, so keeping up and being ready to adapt is very important.

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take in pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Rental Managers!