Any Canadians own a vacation rental in Orlando?

[Skjhjb]

This "plan" of ours is currently a passing fancy, but something we would eventually like to seriously consider.

We both love HGTV, and have enjoyed the new "vacation home for free" show, which gave us the thought.

Eventually, we want to go south for the winter when we are older (like in 20 more years kind of thing).

But we are seriously considering the idea of buying a rental home in Orlando that we can rent all year to cover/help cover the cost of the mortgage/property management fees/hoa fees/what have you. And use it ourselves in the off season.

Anybody here own such a property?

Any advice/tips? (like run away screaming?)

Being a total novice in this area - I'm assuming the mortgage/financing of such a venture is provided by a Canadian bank?

Thanks!

 

[stefanospops]

I sent you a private message with more information, but in short, you can get financing with as little as 20% down. I sell real estate both in Toronto and Florida since I work with many investors and can answer any questions you may have. Thanks.

 

[Sunshine25]

We did exactly that!

You can get a US mortgage, but it was a pain in the you know what. I'm surprised they didn't ask for a DNA sample

We ended up taking equity from our home here, and converted it to US funds (this was when the dollar was good) to purchase it "cash"

We rent it out on VRBO to cover our expenses. We use it personally about 3 times per year. We love it and one of the best decisions we have made

 

[Skjhjb]

We did exactly that!

You can get a US mortgage, but it was a pain in the you know what. I'm surprised they didn't ask for a DNA sample

We ended up taking equity from our home here, and converted it to US funds (this was when the dollar was good) to purchase it "cash"

We rent it out on VRBO to cover our expenses. We use it personally about 3 times per year. We love it and one of the best decisions we have made

Do you have a property management company to look after things since you are up here?

We're debating a condo setting in a resort complex vs a house with it's own pool....

 

[stefanospops]

There are many management companies out there. The charges range, but you can usually find someone to manage it for you for $250/month for a detached house in a gated community. Certainly a house with a pool is the easiest way to go. Keep in mind you can have a lot of wear and tear on the furniture though, so definitely budget to replace furniture on a regular basis.

 

[migel]

We did similar in 2012, purchased a condo using our CIBC line of credit, coverting to USD. Purchasing the condo was a lot simpler than buying property here in Ontario, no lawyer required (unless you really want one). Everything was done via email/fax and phone. Keep in mind however, that monthly costs, especially with resort condos in the Disney area, can be quite high. Monthly HOA alone, (home owners association) fees can vary greatly, the low end about $250 per month, to over $500 per month. Generally a good portion of your expences may be covered by rentals, depending on where your property is, the amenities, etc. If you rent out your place via a property management company, you normally are required to file US Income Tax, reporting the income. We do not rent ours out, so we haven't had to go this route. We're very happy we took the plunge!

 

[canadiankim]

We have kind of 'been there, done that' and whilst it was a good investment at the time, you never know when things can change.

We owned a 4 bedroom, pool villa. It was lovely and came fully furnished. At the beginning we rented it out regularly and covered our costs for running the home as well as pretty much covering the cost of our own vacations. We lived in the UK then and used to travel over for at least 2, 2 week vacations.

HOWEVER, and this can be a big one - you have to be prepared for the times that it doesn't rent and how much you can afford to pay for it yourselves.

Even if you don't have renters in the property you still have hydro, management fees, pool up keep costs, pest control, cable & phone, property taxes etc, etc, etc. This figure can add up monthly if you have no income coming in. Lets face it the rental market is pretty flooded with large beautiful homes.

I would never try and put anyone off the idea of owning in Florida and loved it whilst we owned our house. We sold in 2008 a year after moving to Canada and were very lucky to walk away without owing anybody as this was the time when the US housing market totally tanked.

Given the opportunity, I would consider buying again but would rather wait until I can afford to run two houses and not need to rent it to cover its costs. Our first property there was always bought as an investment property, now if I was going to buy again, it would be more of a retirement property and I have a little while to go before I can do that.

Have fun looking and do lots of research before jumping into this!

Good luck

 

[darkwing]

Just jumping in here. We are beginning the process of looking at purchasing a property that we would use for short term rentals.

For any folks that have a property that they rent - would you be willing to share your expense tracking spreadsheet. I'm just trying to get a handle on all the different categories I need to account for as well as approximate numbers or percentages. I'm not looking to see your personal information - just approximates to help in the decision making.

thanks!

 

[Skjhjb]

Just jumping in here. We are beginning the process of looking at purchasing a property that we would use for short term rentals.

For any folks that have a property that they rent - would you be willing to share your expense tracking spreadsheet. I'm just trying to get a handle on all the different categories I need to account for as well as approximate numbers or percentages. I'm not looking to see your personal information - just approximates to help in the decision making.

thanks!

I'd be interested as well if nobody minds sharing!

I was talking to another business owner here in town, chatting about our "get the hell out of snow town" plan for 5 or 6 years from now. She mentioned a friend of hers has 4 rentals, all about 35 minutes from Disney. I said I know a lot goes into this, and we have to be in a place where we can afford to make payments without rentals in slow months. Maybe her friends are lucky, but they don't really have a slow period - they have no trouble renting at any of their 4 at any time.

So I'd also love to hear from those of you who do own one, do you have consistent rentals? Are you best to buy one that is a current rental and has future bookings? (I noticed some listings do mention all bookings transfer to the new owner)

 

[migel]

I did a lot of research prior to our purchase. The Disney area home/condo/townhome market has been improving over the past two plus years. Prices are slowly climbing, but they likely will never reach the bubble that collapsed a few years ago. Bank foreclosures are down, but they still appear all the time, and along with them, some great deals.

The Disney area is saturated with rental resorts, so prices are still very competative when it comes to rental rates. This translates to less take home profit, once you deduct property management, taxes, etc. Although we do not have our condo in the onsite rental program (Wyndham Vacations), I have always left that option open in case our finances start to strain. From speaking with people and perusing many discussion boards, the key to trying to 'break even' on expences by renting your unit is to become actively involved in marketing it yourself. Even if you use a management company, most say it's important to also publicize via VRBO sites, etc. This gives you a better chance to keep your place rented, especially in off peak periods.

Location of the property is of course key. Amenities are also important. For detached homes, a pool home is a must. Also, short term versus long term rental is something to be considered. If you plan on using the property a few times per year, than you must go with a short term rental property.

Just a few thoughts.

 

[canadiankim]

I did a lot of research prior to our purchase. The Disney area home/condo/townhome market has been improving over the past two plus years. Prices are slowly climbing, but they likely will never reach the bubble that collapsed a few years ago. Bank foreclosures are down, but they still appear all the time, and along with them, some great deals.

The Disney area is saturated with rental resorts, so prices are still very competative when it comes to rental rates. This translates to less take home profit, once you deduct property management, taxes, etc. Although we do not have our condo in the onsite rental program (Wyndham Vacations), I have always left that option open in case our finances start to strain. From speaking with people and perusing many discussion boards, the key to trying to 'break even' on expences by renting your unit is to become actively involved in marketing it yourself. Even if you use a management company, most say it's important to also publicize via VRBO sites, etc. This gives you a better chance to keep your place rented, especially in off peak periods.

Location of the property is of course key. Amenities are also important. For detached homes, a pool home is a must. Also, short term versus long term rental is something to be considered. If you plan on using the property a few times per year, than you must go with a short term rental property.

Just a few thoughts.

Totally agree with the marketing the property yourself. I used to have my villa on at least 3 independent websites and got 80% of my bookings that way rather than through the management company. You have more flexibility if you do most of the renting, and you keep more of the income rather than paying the management company a fee.

I would say that the better the house you can afford the more you will rent it. With the large number of properties available, everyone is looking to get the most for their money. Weigh up what works best for you for when you want to use it too. A villa with a pantry or closest that you can lock up to keep some of your own items is a must. Decide if you want a villa for a single family or like more and more of them now, big enough to accommodate two families.

When we owned our property 2002 - 2006 I would say we had about 65 - 75% occupancy and for us that was enough to cover the costs and cover our trips there. In 2007-2008 when the market was really bad our rentals went down to around 45-55% and that when we decided to get rid of it.

With any property try and remember to include amounts for incidentals, we had a couple of big hurricane seasons and had to replace some shingles, water damage and screen repairs on the pool. All things not worth claiming on your insurance for but enough to put a dent in your profits.

Hope this information is helpful and not too off putting.

 

[Skjhjb]

Totally agree with the marketing the property yourself. I used to have my villa on at least 3 independent websites and got 80% of my bookings that way rather than through the management company. You have more flexibility if you do most of the renting, and you keep more of the income rather than paying the management company a fee.

I would say that the better the house you can afford the more you will rent it. With the large number of properties available, everyone is looking to get the most for their money. Weigh up what works best for you for when you want to use it too. A villa with a pantry or closest that you can lock up to keep some of your own items is a must. Decide if you want a villa for a single family or like more and more of them now, big enough to accommodate two families.

When we owned our property 2002 - 2006 I would say we had about 65 - 75% occupancy and for us that was enough to cover the costs and cover our trips there. In 2007-2008 when the market was really bad our rentals went down to around 45-55% and that when we decided to get rid of it.

With any property try and remember to include amounts for incidentals, we had a couple of big hurricane seasons and had to replace some shingles, water damage and screen repairs on the pool. All things not worth claiming on your insurance for but enough to put a dent in your profits.

Hope this information is helpful and not too off putting.

Thank you - that is a great help! Not too off-putting yet!

I'm wondering what kind of fees we need to count on. So far my list is (assuming we manage the rental/promotion end ourselves):

mortgage
property manager (for cleaning/maintenance/etc)
hoa fee (for a resort type property)
taxes
contingency fund for repairs

Anything I'm missing?

I know we need about 20-25% down for sure (so we are a few years away from a purchase unless we come into some money) and then we'd finance the rest.

We'd be thrilled if the rental income covered all the bills and paid for a week or two vacation for us each year (either in our home or elsewhere).

Our end goal is to have a place we can be at for a few months out of the year when we are retired and sick of the cold winters!

 

[canadiankim]

So you need to factor in

household insurance + extra for hurricanes (if I remember correctly)
Cable, phone & Internet
hydro

in addition to the management fees
pool care
lawn care
pest control
cleaning (after each visitor)

I can't remember if there are annual licences you need for a rental property but these might be under the management fees.

I'm sure if I missed anything someone else will add on to the list.

 

[migel]

If you go with a resort condo, the cable, telephone, Internet and water bills may be included in your monthly HOA fees. Hydro is not. I believe you do have to register for a license if renting, the fee is not high, but it ensures the state collects its tourist impact tax on all rentals.

 

[kamanda]

Here are all my categories but make sure to check what HOA fees include (some include water, cable, etc.) and property management fees (some that are a little higher usually include pool service and pest control)

Advertising
Bank Charges
HOA Dues
Insurance
Commissions
Management Fee
Mortgage Interest
Cleaning fees
Pool Service
Repairs & Maintenance
Accounting fees
Property Taxes
Supplies (bedsheets, towels, etc.)
Cable
Telephone
Internet
Water
Electric

 

[Skjhjb]

Thanks everybody - I can see my list was a tad short!

I appreciate all the advice & pointers & tips - SO much to research and think about.

Yay!

 

[Honeystar120608]

Just a little highjack for a moment, anybody with rental properties here if you'd like to pm me your website as I am looking at different options for a rental in November. Would love to take a peek at what you have. Need to be in the vacinity of seaworld and Universal, but we will have a vehicle and don't mind a little drive.

sorry for highjacking this post.

 

[youngb1978]

I would be interested in seeing some rentals from fellow canadians...looking October or November 2016

 

[sk8jdgca]

discuss this with an estate lawyer also. in order to avoid us estate tax, you may need to set up a canadian inc company to own the property so that you own a Canadian holding not a US one

 

[star72232]

Are you thinking a vacation property, with short-term rentals, or a home that you can rent out long-term and then use yourself in the future?

My parents have done both, and the second option is a lot less work. With the low Canadian dollar it's a harder time to buy, but certainly not impossible.