Orlando is located in Central Florida and has an ever-growing population of around 300,000. This makes it the 4th most populous city in the State of Florida and the 72nd in the nation. The Orlando real estate market benefits from the fact that the population growth rate for the city is twice the national growth rate. For the past 5 years, the city has experienced positive net migration. And with about 65% of this population renting rather than buying a home (according to NeighborhoodScout), Orlando rental properties enjoy high demand and occupancy rates.
The City of Orlando boasts a strong economy which makes for a high employment growth rate. The tourism and entertainment industries lead the way in the city thanks to the presence of popular tourist destinations like Walt Disney World, Sea World, and Universal Orlando Resort. Over 50 million tourists are welcomed annually. Still, the “Theme Park Capital of the World” has a diverse economy with other industries that offer great opportunities to the growing population seeking employment. These industries include healthcare, education, advanced manufacturing, aviation, aerospace, defense, and innovative technologies.
The Orlando housing market landed a spot in the Top 5 Markets to Watch in 2019 in the annual PWC real estate report. It’s actually the #1 real estate market in the South Atlantic and Florida Region of the US. Orlando is continuously recognized as one of the best places to invest in real estate.
|Facts and Market Trends in Orlando|
|Homes For Sale1,301|
|Traditional Vacancy rate5.60%|
|Airbnb Occupancy Rate60.75%|
|Median Rent Price$1,613|
|Median Days on Market89|
|Price to Rent Ratio16.5|
|Average Cap Rate|
|Average Rental Income|
|Median Household Income$41,901|
|RENTAL STRATEGY||STUDIOS||1 ROOM||2 ROOMS||3 ROOMS||4 ROOMS|
Since Q1 of 2000, Orlando properties have experienced a total real estate appreciation of 96.3% according to NeighborhoodScout, which is an annual growth rate of 3.7%. Property value is still climbing in the Orlando real estate market as Zillow reports an appreciation of 8.9% in 2018. Still, Orlando home values remain relatively affordable compared to other top markets in the Florida real estate market and in the US in general. That’s why buying an investment property in Orlando makes for a good real estate investment.
However, the Orlando real estate market is currently a hot seller’s market. There is a limited number of homes for sale on the market, while demand from homebuyers and real estate investors continues to rise as the population grows. This shortage of housing supply is what contributes to the high real estate appreciation that an Orlando real estate investor will enjoy.
The “Happiest Place on Earth” with its booming tourism industry has experienced massive Airbnb growth over the years. Orlando was one of the ten most booked cities at the beginning of 2018 and continues to be a popular Airbnb destination. And because of its growth, city officials legalized short-term rental properties in the summer of 2018. However, the use of a non-owner occupied Airbnb investment property was outlawed. The only way an Airbnb real estate investor can legally operate is with a duplex investment property: living in one unit and renting out the second for income.
To operate within the bounds of the new Airbnb Orlando regulations, the owner of a short-term rental property must be on site during the guests’ stay. Other regulations include a maximum of one booking at a time, no more than two guests in a room, and a maximum of four non-family members in an Airbnb rental property at one time.
Airbnb hosts will also have to register with the city at an initial fee of $275 for the first year and $125 for every year after that. There are also lodging taxes in place that hosts using other short-term rental websites will have to collect from tenants and remit to the city. Airbnb hosts specifically will have this done for them by the platform.
Any Airbnb regulation put in place by the city will not override any existing neighborhood or homeowner association rules that ban short-term rental properties.