Buy an Home in Orlando for short Holiday and Tourist Renting? (Kissimmee: real estate, property taxes)

[alex_lilit]

Good day to all,

My name is Alessandro, Im from Italy, Rome, and i was thinking to buy an home in Orlando for my small Holiday and to rent in the other periods.
I have a small amount, abt 250000 usd that now here, in the center of Rome near Vatican , are enough to buy only a double car park box
So, instead to leave dieing this money in bank (best i can get is 4% of interest), i was thinking to buy an home in such beautiful place.
I red so much in this wonderful forum, and i saw that same area of Orlando are very safe and good for living, other... no so so much.
And thanks to you i discovered a new bad voice: CDD. The Real Estate Agent that is helping me, NEVER said about it.

The Real Estate that is mailing with me suggested to buy a New condo in Kissimmee Area (compass Bay) or a Townhome always in Kissimme, saying its perfect if i use 1-2 weeks year with my family and to rent for tourist for the other period. Suggested Davenport, Windermere and Celebration (more expensive) too.

i hope somebody can help me, so i try put sm questions,( i have a lot of more questions but i dont want bother U)

1) What do u think abt the Real estate suggestion?

2) Better new or second hand home?Condo, Townhouse or Apartment? Wait some months cause seems price are still going little down?

3) The option area taht the Agent gave me are good for living or too much noisy, full of tourists, hurricane, termiti etc etc? Good investment now?

4) Always Real Estate suggested me another solution, to buy an house for long rent so it could be only as investment and no for my holiday. Good idea?

5) Agency that handle the renting are very important, cause depends from them if i can, at least, arrive at end of year without pay nothing for tax, maintenance etc etc. Some suggestion about this important topic?

6) Costs: From what i leanrned and from what the Real Estate Agent said me , in general are: HOA, Taxes (1,4-1.6%), Insurance, electricty, water, cable, termiti disinfestation.. Im sure something is missing something. Being so important this point, can you share with me all type and average amount of costs i could have?

sorry for my bad English and for so many questions, i hope i could explain good my doubts

Many thanks for all and to all

Ciao

Alessandro

[GregTraub]

Your English isn't to bad at all.

1. The suggestion about condo's in Kissimmee, it's borderline. Kissimmee isn't the best place to invest in, I"d prefer Davenport. And as far as condo's go, they are usually the first to drop in value in a real estate correction and the last to come back up in value. Plus the Condo association dues have become very high over the past year and would have a large affect your monthly expenses. I'd stick with single family homes, and MAYBE a townhome.

2. New homes have their positives and negatives, as do second hand homes. As far as Single Family homes, Townhomes, or Condos (apartments) It really depends on your investment goals, risk tolerance for certain aspects, and ability to be hands on from such a distance. I usually do not recommend condo's but there are a few high end projects I might recommend, most aren't in the sub 250K range unless your looking at smaller properties.
Prices are still being pressured downward, no one really knows when it will stop, so timing the market is quite difficult.

3. If your looking to rent out the properties weekly with the ability of staying in the home yourself part of the year, the kissimmee and Davenport area's are really the only area's that allow this. You need to be in a zoning that allows for short-term rentals. Everywhere in FL is suseptible to hurricanes and termites, you hire a certified inspector to inspect the property for termites before buying, and have insurance to cover hurricane damage should it ever occur.
In short-term rental zones you will have many tourists staying in the area, but noise and traffic will differ from neighborhood to neighborhood in the cities you mentioned.

4. It's an idea, but it involves you not being able to use the property when you want to. If your goal was to have a property you can use while still generating rental income, this isn't a good option. If your goal was simply to have an investment in real estate that would provide a good return on investment, this may be an option. The number or properties and locations to choose from will expand dramatically as well.

Renting a property yearly though involves a little more risk of damage occuring to the property from tenants, and are a little harder to manage from afar. The best management companies I have found are usually the ones that handle short-term rentals. That's not to say management companies that deal with yearly rentals are bad, just harder to find.

5. Short-term rentals, can have a higher Return on Investment than yearly rentals, however they have much more volatility and are tied directly with the economy...the better it is the more people go on vacation, the worse, the less. Where as Yearly rentals are less volatile, with tentants turning over much less frequently with a relatively steady demand for rental property despite economic conditions. Again Both have positives and negatives, a direct consultation would be best to help us both understand what your risk tolerances and goals are.

6. Those are the typical expenses. Some properties will have them all some not as many. Property taxes will be on every property, HOA dues will vary from property to property as well as the need to provide utilities to the property. Short-term rentals you would, however in a yearly rental utilities are usually the responsibility of the tenant. Depending on what type of property you purchase you may also have lawn care, pest control, pool maintenance, and different amounts you should put aside for periodic property maintenance.

[alex_lilit]

Many many thanks to your wonderful replay. You helped me to remove many doubts.

really thanks

Ciao

Alessandro

[GregTraub]

No problem Alessandro, if you need any additional assistance I'd be glad to help.

[On-da-Beach]

As a property manager myself, I can say GregTraub has given you some very good advice. I would caution you about any expectations of income. My experience is that many investors buy property thinking it will be easy money. Then after they realize advertising, maintenance, taxes, HOA fees and not to mention dealing with all the people including the potential guests that are really only shopping around for the cheapest rates, they become discouraged. Long term rentals are really difficult from such a distance so make sure tenants are very carefully screened and you get a strong security deposit. If you are going to use a management service, screen them as well. Ask for references and don't be shy about it! Just because a management company is big it doesn't mean they're a good company. Sometimes a big company is too big to give your property the service you should expect.
I wish you the best of luck with whatever choice you make!

[robert999]

I would not buy now. Prices are falling , Kissimmee is looking more depressed than ever ( lots of business' going out and empty retail space is starting to show.) Tourism is falling (High gas prices). hotel timeshare sales are falling. Get the picture? You will be putting up good money in a bad investment right now. You can take the interest from your capital and spend it on a vacation here without the risk or headaches and worries of losing some if not all of it.
Sorry to sound so down but research everything you can before jumping into this

[alex_lilit]

@On-da-Beach

Thanks for your replay.
For sure i cant handle the short renting and the long renting too. So i need a good property manager and some advices if you, and other, have.
For long rental, the Realtor of my friend said that long rent are better for this reasons:

1) U have long, "sure", rents
2) You dont have to include furniture etc etc
3) You dont have to pay for water, gas, electricity
4) There is always a caution to cover problems
5) tenants that before didnt pay a rent or had sm justice problems are screened and cant get a rent again
6) Less tax for the Owner

What do you think?

@GregTraub

My expectations of income are for cover the costs no to "Earn" easy money.
My dream will be a day live there, but reading this forum i start become little worry for those reasons
1) Hurrican and Umidity
2) Crimes
3) relation with neighbours, people.

As i wrote at beginning, im from Rome and i live in good part of Rome, so i would like find something no bad there.
Something that push me to take flight to go there and rest from stress. With good neighbours. A place where i dont have to be worry go out in evening to breath fresh air.
Then Im little worry about how are builded house in USA. Here house are made in so different way. My Exterior wall, for example, are deep 1 Mt
and the central wall is 120 cm... My house was made in 1910, and never had a structural reparir, only paint and smt small.... My worry is to have
some costs for extraordinary maintenace. i dont know if i could explain my doubt.


Again thanks to all, great find so friendly persons so far

Alessandro

[DailyJournalist]

Buy a house on the beach. Kissimmee and Orlando are very inland.