“The Beautiful City”… What else do you need to hear to make you want to invest in the Orlando real estate market? Orlando is not only a beautiful city but also one definitely worth real estate investments. Whether you are a beginner real estate investor looking forward to buying an investment property for the first time or an experienced real estate investor exploring options to grow your real estate investment portfolio, the Orlando real estate market is the place to go. Nonetheless, the question of which the best neighborhoods to invest in in the Orlando housing market are remains. Here we answer this question and give you reasons why.
Related: What Are the Best Real Estate Investments for You?
How does the Orlando real estate market look like?
Real estate investing is all about numbers. In order to be able to make money from their investment properties, real estate investors need numbers such as median property price, expenses, rental income, cash flow, return on investment (including both cash on cash return and cap rate), occupancy rate, and others. Luckily for you, you as a real estate investor don’t anymore have to spend days and weeks going around, collecting data, entering it into spreadsheets, and making calculations to get to these precious numbers. That is to say, conducting real estate market analysis and investment property analysis is no longer a cumbersome, tedious, time-consuming, boring aspect of real estate investing. Actually, both real estate market analysis and investment property analysis have become exciting features of real estate investing thanks to the advancement of the investment property calculator. The best one in the field is Mashvisor’s investment property calculator, which we have used to generate the numbers on the Orlando real estate market below. When reading the numbers, you should keep in mind that the cash on cash return and the cap rate overlap as Mashvisor’s investment property calculator assumes that an investment property is fully paid for in cash.
Related: Mashvisor’s Investment Property Calculator: Real Estate Investing Made Easier
- Median Property Price: $296,000
- Traditional Rental Income: $1,630
- Traditional Cash on Cash Return: 2.4%
- Traditional Cap Rate: 2.4%
- Airbnb Rental Income: $771
- Airbnb Cash on Cash Return: 2.1%
- Airbnb Cap Rate: 2.1%
As you can see, the main feature of the Orlando real estate market is its affordability as the median property price is well below the level in other hot housing markets such as Atlanta ($399,000), Chicago ($411,000), Houston ($464,000), Boston ($826,000), and Los Angeles ($908,000). Property price is of crucial importance in real estate investing for a number of reasons including whether a real estate investor can afford to buy an investment property, what financing method would work best, and what the return on investment would be (cash flow, cash on cash return, and cap rate).
Now, without further ado, let’s have a look at the best neighborhoods to buy an investment property in the Orlando real estate market.
What are the best neighborhoods to invest in the Orlando real estate market?
As a real estate investor, you must know that location is key for the success of a real estate investment. Thus, we focus here on the best neighborhoods to buy an investment property in the Orlando real estate market at the moment.
1. Florida Center North
- Median Property Price: $144,000
- Traditional Rental Income: $1,190
- Traditional Cash on Cash Return: 2.0%
- Traditional Cap Rate: 2.0%
- Airbnb Rental Income: $1,630
- Airbnb Cash on Cash Return: 7.9%
- Airbnb Cap Rate: 7.9%
- Airbnb Occupancy Rate: 64.5%
If you are looking for affordability in your real estate investments, then definitely give Florida Center North a thought. Among the best neighborhoods to invest in, Florida Center North offers the lowest median property price due to the generally low cost of living in this location, which makes return on investment high. The best rental strategy here is Airbnb rentals.
2. Park Central
- Median Property Price: $209,000
- Traditional Rental Income: $1,350
- Traditional Cash on Cash Return: 3.5%
- Traditional Cap Rate: 3.5%
- Airbnb Rental Income: $1,400
- Airbnb Cash on Cash Return: 5.2%
- Airbnb Cap Rate: 5.2%
- Airbnb Occupancy Rate: 47.2%
If you are looking for a location offering rich nightlife and diversity for your real estate investments, you’ve come to the right place in Park Central as one of the best neighborhoods in Orlando. The median property price though is a bit higher, which makes the return on investment lower. Once again, Airbnb rentals are the way to go in this Orlando neighborhood.
3. Wadeview Park
- Median Property Price: $340,000
- Traditional Rental Income: $1,760
- Traditional Cash on Cash Return: 3.3%
- Traditional Cap Rate: 3.3%
- Airbnb Rental Income: $2,070
- Airbnb Cash on Cash Return: 5.1%
- Airbnb Cap Rate: 5.1%
- Airbnb Occupancy Rate: 60.2%
Another one of the best neighborhoods to buy an investment property in the Orlando real estate market is Wadeview Park, especially if you are looking for Airbnb rentals.
4. Millenia
- Median Property Price: $230,000
- Traditional Rental Income: $1,340
- Traditional Cash on Cash Return: 3.3%
- Traditional Cap Rate: 3.3%
- Airbnb Rental Income: $1,530
- Airbnb Cash on Cash Return: 4.7%
- Airbnb Cap Rate: 4.7%
- Airbnb Occupancy Rate: %
According to numbers from Mashvisor’s investment property calculator, #4 of the best neighborhoods to invest in the Orlando real estate market is Millenia. Airbnb rentals generate slightly better return on investment than traditional rentals.
5. Metro West
- Median Property Price: $270,000
- Traditional Rental Income: $1,390
- Traditional Cash on Cash Return: 2.1%
- Traditional Cap Rate: 2.1%
- Airbnb Rental Income: $1,090
- Airbnb Cash on Cash Return: 4.0%
- Airbnb Cap Rate: 4.0%
- Airbnb Occupancy Rate: 60.5%
Yet another option for a location for your Orlando real estate investments is Metro West. Again, Airbnb rentals are the way to go here.
Now, you must have noticed that all of the best neighborhoods to buy an investment property in the Orlando real estate market offer better return on investment for Airbnb rentals than for traditional rentals. This calls for an important question…
How about Airbnb laws in the Orlando real estate market?
Actually Airbnb rentals as well as other short term rentals are generally illegal in the Orlando housing market due to restrictions from 2011. At the same time, they are taxed. The good news is that local lawmakers are looking for ways to regulate the short term rentals industry in the city, so all real estate investors interested in investing in Airbnb rentals in the Orlando real estate market should keep their eyes open in the coming months. Discussions among local lawmakers are likely to continue until a solution is reached. There is a strong need to formally regulate the short term rentals industry in Orlando as Airbnb rentals have experienced a growth of 82% in Orange County in 2017.
Related: What Kind of Airbnb Occupancy Rate Can You Expect?
When investing in the Orlando real estate market, you have plenty of options for the best neighborhoods to buy an investment property. To find specific investment properties worth your money as a real estate investor, make use of Mashvisor’s property search engine and investment property calculator to make the best real estate investments in Orlando and beyond.
