Crunching the Numbers:

Crunching the Numbers:

Does buying a Central Florida Vacation Home make financial sense?

 

So, the idea of buying a vacation home in the Orlando, Kissimmee, or Clermont area sounds great—after all, the possibility of having a furnished pool home that rents out to snowbirds and Florida visitors throughout the year, but that is waiting for you to come home to on your family visits to Florida, seems like a dream come true. But is it? What costs are really involved, and how often are the vacation homes rented? What is the best to hope for?

 

In an attempt to shed some light on this question, we are going to use a real world example of a client who purchased a short term vacation home close to the parks earlier this year. This client bought a 4 bedroom (two masters) 3 bath, pool home in Clermont, Fl this past January. The home came fully furnished, including all appliances (of course), furniture, linens, bedding, silverware, TV’s, and DVD’s and games for visitors. The purchase price was $171,000. The buyer put 20% downpayment, and his total monthly payment (including principal, interest, taxes, and insurance) is $1068 a month.

 

Now, in addition to the house payment, let’s get into other costs you are likely to incur:

 

Most buyers hire a management company that takes care of virtually every aspect of owning and renting a vacation home.  The average management start up cost totaled $2415.  That included:

 

Escrow Balance	$1,000		Lock change	$300
FL State License	$220		Electric Deposit	$400
Occupational License	$55		Cable Install	$175
Tax ID	$5		Water Deposit	$125
Rental Registration	$5		Notary	$5
Start-up Prep	$50		Fire Ext	$75

 

We will also take the start up cost of $2415, and prorate it over the first year, just so that we include it in our calculation. Remember, this is not a cost that will continue but we do want to account for it here. The prorated charge for this start up is $201 per month (for the first year).

 

After the initial start-up cost, the monthly management fee is $520 (this was the fee for this particular client and the management company he chose—this fee varies depending on the company you choose, but this is probably a good average and fits with this example).  This management fee includes:

 

Management services fee of  $185  (email me for a breakdown of this fee)

Pool Care                          $ 95

Lawn Care                            85

PestControl                         30

Phone (unlimited calls)          35

Alarm Service                       40   

Home Inspection                   45    

Web Link                               5                      

 

So, at this point we have the following recurring payments:

Home payment               $1068

Monthly management      $520

Prorated start up fee (1^st yr only)  $201

Total                               $1789

 

Now, let’s take a look at the upcoming bookings that the home has, so we can calculate some income:

 

For the summer months, June through August, the home is presently booked for 52 days. (This is as of today,6/17/11—more bookings may be received as summer gets underway, but we’re just calculating what is currently booked).

 

The 52 days currently booked represents $10,340 of gross receipts. 

This is calculated based on the number of days booked, and when they are booked (some weeks are more expensive than others).

 

The price per night depends on what is called The “Rack Rate” which varies on the season.

For this particular 4 bedroom home:

Low season books for  $175  per night (Jan 5 – April 14, May 2 – July 15, Sept 1 -Dec 15)

High season books for  $195 per night (July 16- Aug. 31)

Holidayseason books  $235 per night ( April 15 – May 1, Dec. 16 – Jan 4 )

 

So if we take the gross receipts of $10,340 and subtract all the carrying costs for three months which include:

Mortgage payment    $1,068

Management fee            520

Pro rated start-up            201  (first year only expense)

Booking fee                    345

Homeowner’s assoc.        33

Total                          $2,167 x 3 months = $6,501 

 

$10,340 – $6501 we end up with a profit of $3839.

 

In this example, the home really does pay for itself and generate some cash flow above and beyond the expenses. Please note that this example showed a home rented 52 days out of 3 months (approx 90 days), so it was a little more than 50% occupancy.  Your “breakeven point” for the house to pay for itself (in this example) is approx 30% occupancy during the low season, and around 25% during high season, and even less during “holiday season”. So as you can see, not only do you get to enjoy your vacation home while you are inFlorida,

………..it may even help pay for itself. 
 

Thank You,

Jim Chuba, SFR 
Castro Realty Group
407-446-5076

 Please note that this example is not intended to guarantee a return on an investment, that would be illegal and unethical. We are simply trying to show you a real world example of a recent buyer’s current experience, and to provide you a list of the various fees you are likely to come across.

If you know anyone who is looking to buy or sell real estate in Orlando, Kissimmee, and the surrounding areas, please refer them to Castro Realty Group. For more information on our company, you can connect with us through the following media:

Website: www.castrorealtygroup.com
Facebook: www.facebook.com/orlandoandkissimmeevacationhomes
Facebook: www.castrorealtygroup.com
Email: jim@castrorealtygroup.com
Office Phone: 407-856-9901

We look forward to hearing from you and working with you to be the best real estate company to represent you in buying or selling your vacation home in Orlando, Kissimmee, Clermont, or Davenport.

Something fun for little princesses at Walt Disney World—Tea at the Grand Floridian and also a visit to the Bibbidi Bobbidi Boutique

Growing up in Central Florida, I’ve had a lot of experience with Walt Disney World. I remember the days when my cousins and I all had yearly passes and we would spend summer days riding everything in the park. I have memories of one of my first high school jobs, when I was a telephone operator for the Disney Resorts. (Most of my friends worked in the park, as characters, or at the ticket windows; but since I was fully bilingual, I was able to get this position in the cool a/c).

Now, as an adult and mother, I have come to learn about new features of Walt Disney World that we have really enjoyed.

Two of these are: the Tea at the Grand Floridian and also the Bibbidi Bobbidi Boutique.  I have a little girl who happens to love all things “girly”; so, when her love of tea parties and princesses was at it’s max, my husband and I decided to give her a fun treat for her birthday.

We took her to the Bibbidi Bobbidi Boutique for a makeover. Now, you should know that there are two boutique locations. One is in Walt Disney World itself, while the other is in Lake Buena Vista(in the World of Disney Store at Downtown Disney).  We didn’t plan on going into the park, so we made an appointment to have her makeover done at the Lake Buena Vista location. We took her in her Princess outfit, although you can also buy one in the store.

It was terrific! The “Fairy Godmothers in Training” did her hair and makeup. They spent a long time making sure to get everything just right and they truly made her feel like a princess as they applied her sparkly makeup. She really loved it and the ladies working in the salon were absolutely wonderful at making the girls feel special. The cost was approximately $50.

After the styling, there was a “Princess Parade” where the girls walked through Lake Buena Vista together, with the parade ending at the Merry go Round. It was very sweet and all the guests in the area would comment on how beautiful all the princesses looked, and the girls all felt very special. It was very much worth the time and money.

 

From there, we went to the Grand Floridian to have Tea with our little Princess. **Make sure you have reservations**. The ambiance was terrific, the food was delicious, and it was fun watching my 3 year old (and my husband) strive to put on their best manners while sipping away at the delicious tea.

Here’s a link to their menu with some pricing:

http://www.wdwinfo.com/wdwinfo/dining/diningdetail.cfm?restaurant.ID=305

I hope you get the chance to enjoy these locations. We enjoyed it so much that we decided to make the “Tea with Mommy and Daddy” a Birthday tradition for our little girl.

And remember, if you are interested in buying a vacation home in the Central Florida area, give us a call at 321-228-9967, email me at contactmarcia@hotmail.com, follow our fan page on Facebook at www.facebook.com/orlandoandkissimmeevacationhomes , and check out our real estate web site at www.castrorealtygroup.com

Central Florida is a great place to visit (and to live!), and we hope you will decide to also purchase a home that you can rent out while you are away, and use while you are here with us in sunny Florida.

Stay tuned, and in the next few days we’ll present a real world example and crunch the numbers on a vacation home purchase, it’s bookings, property management fees, and income generated.

Sincerely,

Marcia Castro Socas,

Broker, Castro Realty Group

If you know anyone looking to buy or sell a home in the Orlando, Kissimmee, Dr Phillips, Windermere, Ocoee, Clermont, Davenport, Oviedo, Altamonte, Casselberry, Winter Park, or surrounding areas, please refer them to us at Castro Realty Group!

Vacation homes currently available on Central Florida MLS

Short term rental condo’s and town houses are available in all sorts of sizes and price ranges in the
Orlando/Kissimmee area. There are presently 46 available (traditional & REO) within 6 miles of the Disney
area ranging from $8,910 to $350,000. There is truly something to fit everyone’s taste and budget.

Below is a link to each listing including 12 different subdivisions.

http://mfr.mlxchange.com/Pub/EmailView.asp?r=974849015&s=MFR&t=MFR

One thing you do want to keep an eye on are the HOA fees that come with owing most condo’s and town homes..
If you viewed the link, you would have seen a wide range of HOA fees from $162–$531 a month. Hoa’s can provide
many amenities like access to pools and gyms, grounds keeping, security, water, cable and insurance for the structure.
Each one may be different, so you want to make sure what they cover before you buy.

Thank You,

Jim Chuba, SFR
Castro Realty Group
407-446-5076

 

Listings linked in this blog are from the Mid Florida Regional MLS and bring you infromation as to properties listed by various sellers and real estate companies in the area. It is most complete picture we can provide you as to what is available today in this market. We welcome your feedback and questions. Thank you.

At Castro Realty Group, we can help you find the right vacation home in the Orlando and Kissimmee area, just give us a call, email us (contactmarcia@hotmail.com), find us on facebook (www.facebook.com/orlandoandkissimmeevacationhomes), or check out our company website at www.castrorealtygroup.com

 

We look forward to fulfilling your real estate home buying and selling needs in the Orlando, Kissimmee, and surrounding areas!!

Why is STR zoning important when buying your Orlando or Kissimmee vacation home?

Why is STR zoning important when buying your Orlando or Kissimmee vacation home?

(information provided by Castro Realty Group, http://www.castrorealtygroup.com)

STR zoning stands for “short term rental” zoning; and, while there are many things to consider when purchasing a vacation home, the zoning is one truly vital aspect in your purchase of a vacation home that you plan to rent out in the Orlando and Kissimmee areas. 

Zoning is the use for a property as defined by the city or county. There are various types of zoning, including residential, commercial, industrial, and agricultural. Homes are considered residential.

An explanation of “zoning”

Under the residential zoning, there is a subcategory that refers to renting out that home. If a property is zoned for long term rental, then the lease term on that property must be 7 months or longer. If a property is zoned for short term rental, then the lease can be done for short time frames (like a week) and the housing is considered transient (similar to a hotel). That is why part of renting out your vacation home as a business involves applying for a business license and a tourism tax license (don’t worry, this process is not difficult at all).

Why rent short term?

Short term renting gives you the flexibility and control over when you rent and when you choose to stay in your vacation home.   That means that if you want to visit in peak season you simply block out those dates or contact your management company and let them know not to book it. After all, what good is owning a home in Central Florida if you can’t use it when you want?

Having a short term rental vacation home is the best of both worlds—it allows you to own a home for when you want to vacation here, while retaining the ability to rent it out when you aren’t using it to help you offset the expense of ownership. 

Unlike a timeshare, you are not tied to a certain week a year. Another major difference between owning a timeshare versus a vacation home, is that if you own a vacation home and rent it out as a business, you will be able to write off certain business expenses (such as mortgage interest, property taxes, utilities, management fees, etc).

In summary

So if you plan to visit and rent, you want to make sure the home you buy is in a neighborhood zoned for short term rentals. You may also want to ask your Realtor to check to make sure the HOA for that neighborhood also approves short term rentals.

Castro Realty Group can work with you to find the right vacation home for you and your family.  We have over 20 years of experience in the Central Florida area and our agents specialize in new home sales as well as resales in the Orlando and Kissimmee areas. 

Our services are available at no cost to home buyers. 

Also, we offer free access to the local MLS, so you can get an idea of homes available in the area. To use it, simply go to our website at www.castrorealtygroup.com or email us and we can search for you and email you some properties and photos to review from the comfort of your computer. Email Jim Chuba at jim@castrorealtygroup.com

For any additional information, call us today at 407-856-9901 or email Jim at jim@castrorealtygroup.com.

Here is a list of some of the short term rental communities that are located within 5 miles of the Disney parks.

 4787 Resort | 8200 Resort | 8303 Resort | Acadia Estates | Bellavida | Blue Heron | Calypso Cay | Cane Island | Chatham Park | Compass Bay | Crestwynd | Emerald Island | Encantada | Floridays | Formosa Gardens | Grand Palms | Grande Palisades | Hawthorne | Indian Creek | Indian Point | Indian Ridge | Indian Wells | ISL Club | Lake Berkley Resort | Lake Buena Vista | Lake Wilson Preserve | Legacy Grand | Lindfields | Lucaya | Mango Key | Meridian | Mona Lisa | Oak Island Cove | Oak Island Harbor | Palm Villas | Palms Hotel | Paradise Cay | Parkway Palms | Regal Oaks | Reunion | Rolling Hills | Royal Oaks | Runaway Beach | Seven Eagles | Sun Lake Condo | Sunset Lakes | Villas at Island Club | Wilshire Oaks | Windsor Hills | Windsor Palms | Windwood Bay | WorldQuest |

Visit us at Castro Realty Group through our website (www.castrorealtygroup.com), our Facebook page (www.facebook.com/castrorealtygroup ), or by following our “Orlando and Kissimmee Vacation Homes” Facebook site ( www.facebook.com/orlandoandkissimmeevacationhomes  ) to get information on great deals on vacation homes as well as tips and trivia on our Central Florida area.