What Buyers Look For When Buying a Vacation Rental Home
The Orlando vacation rental real estate market is complex and diverse with properties ranging from $150k to $1M+. Some properties sell before they have the chance to even hit the MLS, while others take months to sell. While our team doesn't have any real estate agents and we don't perform any real estate transactions, we do witness trends and patterns within the vacation rental real estate industry first hand. This blog encompasses a number of specific items that vacation rental buyers look for time and time again.
It doesn't matter if a wealthy family looking for a second home is purchasing a vacation home, or a pure investor who will never use the property personally in purchasing, every buyer wants to know the revenue that an Orlando vacation home can generate. One major incentive for buyers is having future bookings already in place, which we covered in an earlier blog. Understanding the revenue a property generates, and what expenses will be covered is a key component to the buying process. To learn how much a particular home can generate in the Orlando area, give us a call.
Everyone knows location is crucial in the real estate industry. There are a few important items that buyers consider, outside of the properties location in relation to tourist attractions. Buyers look for locations or resorts that they can picture themselves staying in. Certain amenities such as a large community pool, waterslides, or a tiki bar may be important to them and their experience while they use the property. Location within the community is important too. If a property has a conservation view, a south facing pool, or is closer than other properties to the community amenities, it will be more attractive to buyers and guests to book.
All rental properties are expected to be in good condition with all mechanical aspects to be fully operational. This is important for guests satisfaction, which buyers understand. A broken pool heater, old AC, or inoperable appliances will cost a buyer money to fix or repair, thus likely negatively impacting the purchase of a particular vacation home. This again is common knowledge in the real estate industry, but important to note. Vacation rental homes are held to an even higher standard with properties needing to be thoroughly cleaned before every guests arrival, and items such as touch up painting and furniture cleaning needing to be done regularly.
Speaking of furniture; most vacation rental buyers are looking for a fully furnished property upon purchasing (outside of new construction). Although the furniture will not affect the sales price greatly, modern and updated furniture lends to the rentability of the property and ultimately has a great impact on how a property books. Properties with modern styling in artwork, paint colors and schemes, as well as furniture styling will absolutely sell more quickly than those that are dated. Another thing to consider is that vacation rental buyers in Orlando are most of the time not living near the area, and therefor will not be doing any of the work themselves. What you can normally do in terms of "sweat equity" is not possible, and handymen or other vendors will be an expense occurred to handle items such as repairs and renovating, painting, or decor updating. Something to keep in mind.
Lastly, a vacation rental home buyer is very concerned as to what the expenses of ownership will look like with a particular vacation home. Some buyers are very focused on communities with low HOA fees, while others are not. IT's important for a buyer to consider utility expenses, property taxes, property & liability insurance, governmental compliance items (such as licensing and fire extinguishers), management expenses, and maintenance item before purchasing. Potential expenses such as updating or repair work should also be taken into consideration, which is why it's important to go into detail with each number addressed in this blog during the buying process.
Of course revenue and expenses go together like PB&J, and looking at both quantitatively is the best way to analyze a property before purchase. To receive a rental estimate and cash flow estimate, contact us!
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The Orlando vacation rental real estate market is complex and diverse with properties ranging from $150k to $1M+. Some properties sell before they have the chance to even hit the MLS, while others take months to sell. While our team doesn't have any real estate agents and we don't perform any real estate transactions, we do witness trends and...
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