When a person in Orlando FL says “short term rentals” they mean homes that rent for 1 to 7 days. Most people in the property management business will use the term lease once a contract exceeds 30 days. Short term rentals are actually restricted in Orange County FL and allowed in very few places within its’ boundaries. In counties like Lake County, Osceola County and Polk County where renting in this manor is allowed the cities or Home Owners Associations may still restrict your ability to lease.
Some of the pitfalls of short-term leasing are often overlooked by the more eager investors. As a general rule asking yourself why a home is being sold in a resort community is a good idea. Sometimes the answer may be that the seller has realized that the money to be made is in management not ownership.
Before purchasing a short-term rental speak with a loan officer. Ask them what the difference is in financing an investment property as apposed to a second home. You will find the interest rates are considerably higher for an investment property and so is the expected down payment. For this reason, many purchase second homes, then later decide to lease them. You may also want to make sure the type of financing you want to get is even available on an investment property as it may not be.
Normally you can ask for the past rental history of a home you are considering purchasing. This is good information on a property but it can serve as a distraction. What you really want to know is the average occupancy rate over a 1-year period for the entire community. Also ask if you are allowed to reside in the property full time or if your stays are limited during the year. This is very important. You cannot live full time in many resort communities. That also means they likely demand your home be placed on the short-term market for at least 6 months a year. Why does that matter? You cannot get those types homes financed as a second home.
When looking for or questioning a property management company here are just a few good questions.
How do you decide which property leases next?
Can returning tenants request a specific property?
What is you fee and are there additional fees including advertisement?
Are there times I am not allowed to stay in my property?
What guidelines must I follow to schedule time to stay in my property?
As you can see things can get somewhat complex. Some communities which let you choose outside management may restrict use of the amenities that your tenant can use. It actually happens so make sure you ask the right questions. These are just some of the reasons that most savvy investors prefer purchasing homes and leasing them out for 6 months to a year at a time.