View Full Version : For those who own their own vacation homes
06-30-2006, 05:49 PM
in the Orlando/Disney area:
Do you find that your rental income from your vacation home covers the mortgage?
Are any of you actually making money off these homes?
Or is it more of a convenience for you to have your own vacation home and the rental income is just supplemental?
Just wondering...I'm trying to convince DH to invest in either a pool home or condotel villa in Kissimmee/Orlando.
07-01-2006, 12:54 AM
Hi I don't think you are going to like what I have to say , but in answer to your questions no the villa rental does not cover your mortgage unless you have a very low one , and it is very hard work and time consuming to market your property and get renters in . We have had are property since March and at the moment I am working on the villa probually 5-7 hours everday that is on top of my normal job and running a family home it is not what we thought it was going to be like . If you really want to buy then think about and then think about again and also consider your family it is hard work for them as well . I wish you all the luck in the world if you do go ahead andI am, soory this sounded so bleack but I wish someone had told us before we bought. :wave2:
07-01-2006, 02:04 AM
We have owned for 8 years now and it has got harder every year to cover costs .If incomes covers costs then you are very lucky or have low costs a lot of owners have to subsidise their homes over and above the income they get.As wildwood says it is a big job if you are going to take on the rentals yourself and this is really the only way to get a decent rate as the agencies only give you portion of what they charge any guests and you have to pay the bills which are rising all the time .
It is nice to have a base in the sunshine for the family but would I buy now knowing what I know -not a chance.
07-01-2006, 06:01 AM
When our apt went condo we were in a flurry trying to find a place to live. Fortunately for us, short term rentals for the summer weren't as promising as previous years and many owners were offering long term. A lot of the homes were furnished and we didn't need that. It wasn't easy to find one that wasn't. Luckily we did. Homeowners on our street said that the majority of short term rentals were being sold or rented out long term since the owners weren't making the income of previous years.
07-01-2006, 06:27 AM
We purchased a condo at Windsor Hills last year. We purchased to use for vacations as well as an investment. We decided to buy in Windsor Hills since we were looking for something new with a lot of amenities and close to the parks to hopefully be able to rent well. A 2 bedroom/2bath was ideal for us as we are a small family yet the condo sleeps six if we decide to bring along a few relatives or friends.
I would do alot of research to determine what's best for your family and what you can afford. There are so many places to look at and many more being built. The influx of homes and condos being built means more competion for the rentals. We are doing better this year with rentals because our community is becoming more popular. It is alot of work to get rentals because there are so many places to rent. I enjoy it though and have learned a lot.
The cost of running a home or condo is very high. For us in addition to our loan we still have taxes, utilities, management fees, cleanings, maintence and condo fees which are very high. We pay a homeowner association fee for upkeep of the grounds, community center and pool and a condo fee for our individual building.Everything is kept very nice but you are going to pay for all those amenities and extras.
We do however enjoy our place very much and are glad we purchased in Windsor Hills. I have been able to squeeze in a few extra trips and know we will have a nice place to visit in the future whenever we can. We are not making money though but hopefully will come close to covering our expenses this year. Good luck to you.
07-01-2006, 08:35 AM
All of the above is what I would second.
If you are thinking of buying just make sure you can afford to cover the expenses if that month there are no retals. A business I am told should be making money by the third year. If I cover most of my expenses by next year I will be saying something. I don't want to sound like a nay sayer but it is a lot harder then I had first thought. I also had never ran a business I worked in social services.
Lots more paper work then you think. Keeping up with lic. and county and state tax, there is also a tangable tax each year. There are the accomidations requests, leases, confirmation statement, key codes and directions. I figured how hard can it be? We had bought in emerald island resort onre of the closest to disney, its gated, has amenities people should be bnging our doors down to stay there. NOT!! Oh well?
Then we bought the home 2 years ago and we walked into a brand new home. Almost 3000 sq feet to furnish. Not just furnish but make it so people would want to come stay in it. We also bought a 6 bed 5 bath so there is a lot of stuff to fill it. $$$ was going faster but it was on a card so you dont really see the end result until we were purchasing tv stands to putt all the tv's dvd's and vcr's on. They would not let us do it. Was my face red. That had never happened to us. We had to call the cc comp and tell them it was not stolen we were purchasing thing for our new rental home.
Then the website set up, and business cards and flyerr. Then you wait and hope to heck all of the above are working. We are on our 4th man/co our first one we saw on the national news how they had swindeled a bunch of folks one easter week. Our second walked into our home and said it needed so much more such as armoirs to hide tv's, pictures on the walls there was a lot of empty space, and so no and so on. We had what we thought were the ideal husband and wife. After the first year we didn't hear to much from them.
It sounds like an awful experience but I personally would not change it for the world. We have wonderful family vacations and if works in the next year we keepit and if it dosn't we sell. We bought before everything went crazy so we are one of the fortunate ones. Our home took 22 months to build so we had a contract long before the market went crazy. We keep saying we are in a win win situation. Only time will tell.
As a potential buyer you need the good the bad and the ugly. You do not want to go into this then get blind sided. Anything more just pm me and I can give you real hard #'s. Deb
07-01-2006, 12:17 PM
I also have to agree with what all the others are saying. We love our vacation home and wouldn't trade it but you must have the money to cover what rentals do not cover. Also, you must be prepared to be able to replace things if they get broken or worn out.
Again, you MUST have a dependable management company.
It is a lot of work. In my case it is well worth it.
If you decide to buy make sure you do a lot of research and talk to a lot of vaction home owners before you make your decision.
Best of luck in your decision.
07-01-2006, 01:18 PM
Hello, we purchased 7BR/6bath right after 9/11...prices were low, and the companies were giving lots of $$ for closing costs and the realtor gave us 4K just to use them to purchase in Emerald Island. We sold 18 months later as the competition was getting crazy and unless you had HGTV and high end games rooms, the savvy internet renter passed you buy.
Three years ago, you could buy a new home, sit on it for a year, and make money even it hardly rented. As I see it that has all changed. Rents are trying to stay level but I see scared owners almost in bidding wars for rents.
I think those who bought when 3-5 bedrooms were $99to $149,000 or can pay off mortgage are OK. It is the folks trying to pay a huge mortgage plus maintainance and struggling to get $800/week that are very disheartened.
Finally, DO NOT believe anything anyone who stands to make money off you says about how many weeks you can get for rentals.
If you decide to do it, IMHO it has become a buyers market and I would really look at offering way below asking price...No realtor will tell you that, as they represent the buyer, but there may be some relative bargains to be had in the preowned market....
Best locations in my opinion are all off Formosa Gardens Blvd or Old Lake Wilson...sorry to say it, but Highway 27 has become so busy and dangerous that we avoid it completely. They have put in so many new (and needed!) stop lights on 27 and 192 West of Disney, that the easy drive in is now gone.
Good Luck...my guess is this thread has really got you thinking....
07-02-2006, 12:21 AM
Your responses have been very enlightening.
I spent a few hours just researching on the internet how many condotels are coming up in the Disney area. That plus all of the rentals I have seen in my own search has led me to believe that the market is flooded and will only get worse sooner rather than later.
I thank you all for your responses!
(P.S. For my family, we will always rent a vacation home when we visit WDW as we think it offers the best our money can buy).
Good luck to all of you!
07-02-2006, 05:26 AM
I have had my home for two and a half years now and all costs ,including mortgage have been covered by rentals.So it is possible.
There are some lovely resales up for sale.Id never recommend buying new at the ridiculous prices - as no,you wont cover thse sorts of costs.
This is 100 % truth and it has been hard work,spending many hours on computer.
Ive had several great holidays there.
Ive made some new friends.
07-02-2006, 09:46 AM
There are some lovely resales up for sale.Id never recommend buying new at the ridiculous prices - as no,you wont cover thse sorts of costs.
Amen to that. Builders are selling the idea that short term rentals can cover costs, but they can't. Too many short term rentals are flooding the market mostly because builders promising income.
I bought mine way too late. I started looking in 2003 and bought in 2006, just after the big jump in prices. I kick myself everyday for not buying sooner.
The market is slumping now. Which is the best time to buy. I paid $257 for a home that would have sold for $289 or $300 just a few months earlier. It's now gone up in value a bit in the short time I've had it, although not many are buying yet. One next door just sold for $280 something.
A few years from now prices might go up again. It seems after the hurricane season is over people feel comfortable buying.
PS: $400,000 plus for a condo just seems crazy to me. I got a stand alone 3 bed 2 bath with a pool and large lot for slightly more than half and I don't have condo fees.
07-02-2006, 12:05 PM
has led me to believe that the market is flooded and will only get worse sooner rather than later.
Each year I go down, I'm amazed at how little I pay for a villa rental, compared to rates that, say, folks who own homes in the Outer Banks get. Granted, the OB market only has a 5-month rental period (or so) so it's just as hard to make money, but the great deals for the renter aren't there. We've looked into buying there, too, and come away with the same conclusion---you can use short-term rentals to help offset the costs of eventually owning your summer retirement home near the ocean, but you're unlikely to make money in the near term.
07-02-2006, 01:15 PM
I am not sure most home owners are in it for profit. I think most just like having a place for vacation time and if it can help pay for the bills lucky them.
I can not imagine making any money with repairs and upgrades that are needed all the time. We have just had ours for 2 years and we add every time we go down. We also did not buy an existing home we had ours built. Not until you do something like this do you have any idea what you need.
We travel from RI twice a year with loads of luggage. I purchase new items all year long and take them down when we fly down. SW airlines loves to see us coming. I had 12 bags have to get checked last time we went down out of 15. You are able to bring down 3 per person and there are 5 of us.
When ever friends or family go I also have them take things down for the house. Some day I keep saying we will be able to just go down with a small carry on. Not!! LOL
I know it is worth it because when I read our guest book it brings tears to my eyes. They love my baby as much as we do. To all you renters thank you for your kind words it makes it all worth it.
07-02-2006, 01:43 PM
Hi, We have had our own home "at Disney" for about 14 months. It was a dream that we finally did when we found the right house in the right location. I agree with Isla Bonita regarding if the rentals offset our costs then that is just a bonus. We don't expect the rentals to pay for all the costs incurred or to "make money" renting our home out when our family is not using it. However, we did come pretty close to breaking even last year. We also are very picky regarding our terms and conditions. We have turned down more than several potential guests over the last year. (Spring breakers, and others that we did not think appreciated the quality of the home and furnishings.) We have met some great people who have become friends (from all over) which has been wonderful as well.
We love our home and it brings great joy to go "home". That is the payoff. Everything else is just icing on the cake!
I hope this helps! Have a great day!
07-02-2006, 09:43 PM
Thanks so much! I'm glad a posted this inquiry here.
It has made me really look at why I want to buy a villa in Kissimmee (ok, other than the obvious excuse that I would HAVE to go to Orlando every year, just to check on the house). ;)
DH and I have a lot of things to think about.
07-02-2006, 10:28 PM
LaIslaBonita (love that song!!)
You bought my dream house!! We were sooooo close to purchasing that home in Emerald Isle!! We had a windfall and were going to put it down on that large floorplan in EI.
We had been staying in Villas since 2001 and everyone is right, they were cheap!! Dh and I couldnt believe all you got for less than $125K. Some (Lennar for sure) were including all furnishings. In 2002 we started seriously looking and EI was coming along nicely. I couldnt believe the huge homes for less than $200K.
We went thru a similar process of discussingthe rents, the work, the vacations and having never stayed onsite to that point, we decided we should at least try it before committing to being offsite. We loved the Vacation Homes and really didnt think we'd enjoy onsite as much, but we still had to know.
The sales office at EI did tell us that we would be able to rent over 40 weeks a year, but I knew better and I also knew that we would have to manage our own bookings if we wanted to make any money.
Well, we took our windfall and purchased DVC instead. Im not pushing DVC, because I know there is a big difference between owning a home and having a preowned situation that lasts 50 years but just sharing our process and conclusions.
Wise people gave me advice too. Upkeep is expensive, and I know me, I would want the best in my home. I would want my home in pristine condition and I would give my clients my all. I saw the home consuming me and consuming our vacations.
OTOH, there was DVC, turnkey operation, flowers planted, hi level of maintenance, on call staff, etc. The yearly DVC maintenance fees would run us approx. what 2 months of covering the rental shortfalls and breakage would cost us on our EI home. I figured I could work hard and rent EI 40 weeks a year so that's how I calculated that number.
Seeing how the market has boomed, I sometimes mourn our EI home, and know we could have made money had we purchased back then. But knowing yourself and your partner well helps tremendously.
07-02-2006, 11:01 PM
Thank you for all those nice things you have said, you have very good taste. LOL
I look at it this way every mortgage payment we put in is like money in the bank. We have a wonderful place to hang out with our family and friends.
Because we own in Florida we can get some pretty great discounts. Also college might be pretty great for my kids. A lot of bennys while we own. Can't beat that.
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