The House of Mouse is embarking on a new journey with its Disney homes project called Storyliving by Disney. How will the project affect the company and the real estate industry as a whole? Read on for more.
Disney Is Set out to Literally Become the House of Mouse
What person did not grow up with a favorite Disney character or movie? Since the time of its creation, Walt Disney Company’s provided endless hours of entertainment and family fun to several generations of fans. From cartoons and movies to theme parks, Disney is synonymous with high-quality entertainment. Its theme parks are widely known as the happiest places on Earth.
And now, the global entertainment company is set to mark yet another milestone in its already stacked list of accomplishments. The House of Mouse recently announced its plans to get into the real estate industry with its new business of residential communities known as Storyliving by Disney.
The first Disney homes project will be located in Rancho Mirage in the Coachella CA real estate market, where Walt Disney himself once owned a home. The Rancho Mirage project, called Cotino, will house communities suitable for guests from all walks of life. However, there will be a specific community that will be geared toward big kids 55 years and older.
Josh D’Amaro, chairman of Disney Parks, Experiences, and Products, said that, for nearly a century, the company shared countless stories that touched the lives of countless people. He says that as they enter their second century, Disney is developing exciting new ways to bring the company to where the people are. From storytelling to storyliving, the aptly named Disney homes project will consist of single-family homes and condominiums that will let its residents experience the Disney magic day in and day out.
Related: Single Family Homes: Advantages & Disadvantages
Cotino, however, will not be your typical housing development or community as it will also be zoned as a resort and commercial complex, complete with hotels, restaurants, and shopping centers. The area is also home to a 24-acre lagoon, a portion of which will be converted into a beach park that offers numerous family-friendly activities. The said park will be open to the public with the purchase of a day pass.
The community will be managed and operated by Disney homes cast members. Club memberships will also be offered to residents who will give them access to certain perks and privileges such as entertainment, cooking classes, wellness programs, and a lot more.
Disney Imagineers will also play a very important role in the development of the Storyliving by Disney communities. Both indoor and outdoor spaces will be specifically designed according to the local region’s natural wealth and beauty. It will allow each Disney homes project to take on a distinct identity while still retaining the branding and experience the company is well known for.
What Does Disney’s New Project Mean for Real Estate Investors?
As Disney launches Storyliving with Cotino, real estate investors will get the opportunity to invest in turnkey properties. The properties can be converted into traditional or Airbnb properties to generate passive income and expand one’s real estate investment portfolio.
The Cotino project, in particular, will help generate more jobs in the Coachella CA housing market and improve the local tourism industry with a new Disney Resorts-type of housing development. The expected tourism boost makes it ideal for both traditional and vacation rental businesses.
For those who are wondering how profitable Coachella CA investment properties are, here are the latest market data according to Mashvisor:
- Median Property Price: $352,556
- Average Price per Square Foot: $275
- Monthly Traditional Rental Income: $1,787
- Traditional Cash on Cash Return: 2.71%
- Traditional Cap Rate: 2.77%
- Monthly Airbnb Rental Income: $3,937
- Airbnb Cash on Cash Return: 6.06%
- Airbnb Cap Rate: 6.18%
- Airbnb Daily Rate: $657
- Airbnb Occupancy Rate: 36%
- Walk Score: 63
Traditional rental property owners may benefit from the housing development at the onset because of the expected jobs growth. It can potentially attract workers from different locations, which can increase the rate of in-migration to the Riverside location. A project of such size will take several months, or even years, to complete. It means that there will be an increase in the demand for long-term housing for the first few years of construction.
On the other hand, Airbnb rental property investors will eventually benefit as the resort-style residential complex is not just meant to house residents but attract tourists as well. It can open great business opportunities for a real estate investor with plans of starting Airbnb business in Coachella.
Related: Is Airbnb Profitable in 2022?
Pros and Cons of Investing in Turnkey Properties
As the Storyline communities are turnkey properties, what opportunities does Disney’s latest move bring to real estate investors?
What Are Turnkey Properties?
The simplest definition of turnkey properties is they are properties that are ready for occupancy upon purchase. Most rental property investments require some repairs and updates before they can be considered rent-worthy properties. It means that it will take some time before the property can generate income for the investor.
Turnkey properties eliminate such a challenge as investors can immediately rent them out as soon as they purchase the property. In a lot of cases, they already come with professional property management services, which takes a heavy load off of investors’ shoulders.
The Pros of Turnkey Property Investing
Turnkey properties come with several advantages over typical rental property investments. Here are a few of them:
Ready for occupancy. As the name suggests, the property is ready for tenants upon the turn of the key. There is no need for repairs, which is a great time- and money-saver. At the very least, investors can spruce up the property by adding furniture or appliances to make it more attractive.
Immediate income. Since the property is ready for occupancy, investment property owners can immediately rent them out and start collecting income. Regardless of whether they go the long-term rental route or get the property listed on Airbnb, its rent-readiness means investors don’t need to wait too long to start making money.
Hands-off investing. Investors get to enjoy hands-off investing with turnkey properties since they don’t require much to get them up and running. You don’t even need previous experience as an investor or landlord, which makes it ideal for first-time investors.
Greater feasibility for out-of-state investing. Investing in turnkey properties is also ideal for out-of-state investors as the workload and legwork aren’t as demanding as the typical rental property investment. You no longer need to deal with any repairs, plus most of them come with property management services; out-of-state investors can take full advantage of them.
Related: The Steps to Buying a House Out of State
The Cons of Turnkey Property Investing
In addition to the benefits provided by turnkey properties, they also come with certain drawbacks, such as the following:
Higher prices. Because turnkey properties are pretty much ready to go and with property management teams attached to them, expect to pay higher prices for them, especially if they bear the stamp of the Mouse.
Less personalization. Since repairs and fixes are no longer needed, investment property owners aren’t afforded the flexibility to dictate how the property should look aesthetically.
Fewer investment options. While turnkey properties may be a great investment opportunity, the reality is that not all real estate markets offer such types of income properties. People who are specifically looking for turnkey investments face limited options.
Is Disney’s Storyline Community Worth Investing in?
One of the advantages of investing in developments owned by a company as big as Disney is it gives investors a greater sense of stability for their investment. Aside from being a household name, Disney is pretty much a thriving entertainment empire with over $203 billion in total assets and a net worth of at least $97 billion to date. With its acquisition of 21st Century Fox back in 2019, it became the biggest media conglomerate in the world.
Disney is known for its ability to innovate and create opportunities as it continues to expand its territory by venturing into other industries. From cartoon shorts to full-length movies, from movie productions to streaming services, from theme parks and resorts to residential communities, there seems to be no stopping the Mickey Mouse train from plowing through parts unknown. And although real estate might be new territory for the company, it is motivated by an intense desire to bring the Disney magic to where folks are so they can experience world-class service in places people dream of living in.
As Walt Disney is always quoted as saying, “If you can dream it, you can do it.” If, as a real estate investor, you believe that investing in a Disney-owned real estate property can make you achieve your goals and make your dreams come true, don’t be afraid to step up to the plate.
Of course, you’ll need to do your homework and make sure that everything checks out. For this reason, having not just the right opportunity but also the right real estate investment tool, like Mashvisor, comes in very handy. Mashvisor can help investors locate profitable properties and perform real estate market analysis in a fraction of the time.
With the help of tools like the Property Finder and Investment Property Calculator, investors can quickly sift through properties in a specific location and identify which ones meet their investment goals and criteria. The platform’s massive database is regularly updated, which enables investors to come up with the most accurate market and property analysis. It also includes a large real estate agent directory that connects users to local real estate professionals who can help make the investment journey a lot easier.
Mashvisor’s Investment Property Calculator can help users identify potentially lucrative investment properties based on several metrics, such as cash flow, cash on cash return, and cap rate.
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The Bottom Line
The Disney homes project shows a lot of potential as it fully (and unashamedly) makes use of everything that the Disney brand is known for. Although real estate developments are uncharted territory for the House of Mouse, given its track record and unfailing Midas touch, it wouldn’t be a surprise to see Storyliving by Disney take over the real estate industry by storm.
However, just because the Mickey Mouse brand is slapped onto the residential community doesn’t necessarily mean that it is the right real estate investment opportunity for you. Turnkey investment properties don’t always work for all types of investors. To find out if it is the right investment opportunity for you, you need to perform extensive due diligence and consult with the right real estate professionals. Mashvisor can help you with your research and connect you with real estate agents in areas of your choice.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.