Investing in the Orlando real estate market has proven to be quite the smart move for investors across the country. Not just any housing market offers the unique opportunities Orlando does. The Orlando housing market ticks all the boxes for a strong real estate investment in 2019: appreciation, affordability, and demand.
If you’re reading this, that means you’re already thinking about buying a house in Orlando. So let’s give you what you’re here for- the best places to buy rental property in the Orlando real estate market 2019.
Best Neighborhoods in Orlando- Mashvisor’s Data
Mashvisor’s investment property calculator makes it easy for real estate investors to find data and determine the best investment locations anywhere in the US housing market. To learn more about how our tools work, click here.
A key feature of our tool is that it analyzes rental property performance under two strategies: long term rentals and short term rentals. Data for traditional rental listings is collected and analyzed, the same is done for Airbnb listings. Orlando investment properties perform better when you choose the right strategy for the right neighborhood. So here is where you should invest in the Orlando real estate market for traditional rentals.
1) Holden Heights
- Median Property Price: $140,967
- Price per Square Foot: $103
- Monthly Traditional Rental Income: $2,077
- Traditional Cash on Cash Return: 9.8%
2) West Colonial
- Median Property Price: $119,450
- Price per Square Foot: $118
- Monthly Traditional Rental Income: $1,440
- Traditional Cash on Cash Return: 6.7%
3) Malibu Groves
- Median Property Price: $172,033
- Price per Square Foot: $125
- Monthly Traditional Rental Income: $1,733
- Traditional Cash on Cash Return: 6.3%
4) Lake Copeland
- Median Property Price: $433,760
- Price per Square Foot: $199
- Monthly Traditional Rental Income: $3,398
- Traditional Cash on Cash Return: 3.7%
- Median Property Price: $207,960
- Price per Square Foot: $148
- Monthly Traditional Rental Income: $1,482
- Traditional Cash on Cash Return: 3.2%
Orlando real estate investors should start their search in these areas first if they want better chances at a profitable long term rental. Now, where should you invest for Airbnb rentals in the Orlando housing market 2019? When it comes to Airbnb, there’s another question you should be asking- Is it even legal?
Short Term Rental Regulations in Orlando
The regulations on Airbnb and other short term rental platforms in the Florida real estate market differ based on the region you’re in. In Orlando, new Airbnb regulations have just recently taken effect. A new ordinance approved in February has officially made it legal for Orlando homeowners to rent out part of their homes to short-term guests. So this isn’t the best news for Orlando real estate investors planning on buying properties and operating them as full-time short term rentals.
It seems that the only way for an Airbnb rental strategy to work is if real estate investors choose an Orlando duplex property and set that up as a short term rental. As long as they live in one unit, the other can be entirely rented out. A couple of other rules that came with this ordinance include:
- Hosts can only have one booking at a time
- A maximum of two people per room
- A maximum of four non-family members at a time in the rental unit
- Hosts must register with the city, paying a fee of $275
- A 6 percent state transient rental tax, among other lodging taxes, is applied to these short term rentals. Airbnb automatically collects these taxes for its Orlando hosts.
Based on this information, Orlando real estate investors should determine whether or not Airbnb is a good investment strategy for them. Mashvisor’s data projects high Airbnb return rates for a large number of neighborhoods in the Orlando real estate market. If you’re interested in buying a property and renting out part of your residence, or taking on the duplex strategy, sign up for a 14-day free trial to access our Airbnb rental property performance data in Orlando and get 20% off.
Orlando Real Estate Market Trends
The Orlando real estate market has been on the books as a strong investment location for years now. The market’s strength will continue on throughout the rest of the year and well into 2020. It’s witnessed some trends which make it a prime market for real estate investment. If you do wish to buy an investment property in any of the Orlando neighborhoods listed above, it’s important to know these trends first.
Slow and Steady Price Growth
According to Mashvisor’s data, the median property price for Orlando homes is $348,399, and the average price per square foot is $182. Orlando houses for sale are slowly going up in their prices as 2019 progresses, but this isn’t a bad thing. Quite the contrary, price and value growth indicate a strong market.
The Orlando real estate market forecast for 2019 shows that this price growth has been apparent from the beginning of the year. For example, the median price for single-family homes in January increased 10.1 percent over the year before, and condo prices had increased by 15.1 percent. Taking a look at the Orlando Regional Realtor Association forecast, we can see that the overall median price of Orlando homes is 94.8 percent above the city’s bottom-out price in 2011. This shows a solid market with strong value recovery.
A Strong Rental Market
With a population of over 2.5 million people and an expected population growth of 2.3 percent, the Orlando real estate market has definitely got a lot of housing demand. Great news for rental property owners, Orlando’s also got a very strong rental market. While rents in the Orlando housing market have increased by 2.5 percent (past the country’s and nation’s level), renter demand remains high.
Only 35 percent of Orlando’s population are homeowners. The rest, mainly composed of the baby boomer and millennial generations, rent their housing. An Orlando investment property will perform very well under these conditions. Here’s Mashvisor’s data on average rental property performance in the Orlando real estate market:
- Monthly Traditional Rental Income: $1,685
- Traditional Cash on Cash Return: 1.6%
These are strong city-level numbers, but buyers should move quickly to find a good deal as housing availability is decreasing making Orlando a seller’s market, according to Zillow. To start searching for Orlando investment property, click here.
Strong Tourism Industry
It isn’t just a place people want to live; Orlando is also very heavily visited by tourists from all over. Although it’s visited by a high volume of people every year, its most notable year was 2017 when the city welcomed more than 72 million tourists. The Orlando real estate market hit records as the most visited tourist location in the country. Here are the Airbnb statistics for the city:
- Monthly Airbnb Rental Income: $2,811
- Airbnb Cash on Cash Return: 4.0%
- Airbnb Occupancy Rate: 60.5%
Don’t wait too long on this profitable real estate market. Orlando is definitely full of investment opportunities, but you just need the right resources to beat out the competition.
To learn about how Mashvisor will help you make faster and smarter real estate investment decisions, click here.