Orlando Airbnb

Thanks to its world-renowned theme parks, numerous conference facilities, and great weather, Orlando hosts around 75 million tourists every year. That’s an incredible amount - it even outranks NYC (67 million). Because of this, Orlando remains an incredibly lucrative location for setting up a rental property and using a service platform like Airbnb or VRBO.

“The short-term rental market (STR) is strong here in the Orlando area. Clients understand that this is a very popular area for vacationers and they haven't hesitated to jump on the STR bandwagon,” says Orlando-based buyer agent Nyjuwon Hatcher.

Orlando may be one of the best places to buy an Airbnb property, but short-term rentals aren’t for everyone. There are challenges with the Orlando market, even as there are plenty of benefits. Here’s what you need to know. 

Is Airbnb Legal in Orlando? 

Airbnb (and VRBO) are legal in Orlando, but you'll need to adhere to local zoning requirements as well as building and housing standards (view the Orlando City Code).

You'll need to register your short-term rental as a business and pay taxes on your business if you operate within city limits (view permit/business tax receipt info).

Your guests will also pay when they book with you - Florida's transient rental tax is currently 6% of the listing price (including cleaning fee) for reservations shorter than 182 nights. Airbnb takes care of this charge for you.

Benefits of Owning an Airbnb Home in Orlando

There are a few reasons that Orlando really stands out in terms of being a great location for owning an Airbnb.

Occupancy for Orlando Airbnbs

Few properties are booked 100% of the time. Orlando Airbnb locations have an average occupancy rate of 70% (88% in July, and 60% in September). For comparison, the average occupancy rate for an Airbnb is 48% in the U.S. - meaning that Orlando’s slow season still surpasses the national average. 

Having a high rate of occupancy is important for profitability - it can sound amazing to rake in $200 a night when your mortgage is only $1,600 a month. However, if your home is only occupied for less than half the month, you may struggle to actually profit from your rental property after all the necessary fees and cleaning services are paid for. 

Airbnb is More Popular Than Ever, Post Vaccine

"Now is a great time to be investing, as 'U.S. short-term rentals are earning an average of 39% more annually than they were prior to the pandemic,' thanks to high average rates and occupancy, as we detailed in our Best Places to Invest report earlier this year," explains AirDNA Public Relations Associate Madeleine Parkin. "Destination markets are likely to have another strong year this year."

Orlando was also listed as the #1 most booked destination for spring break travel as of January, as per AirDNA's January monthly review:

"Americans are ready to travel again in 2022, as evidenced by strong booking to start the year. Top markets for spring travel in 2022, in terms of nights booked for March/April travel, include: 

1. Orlando, FL 2. Phoenix, AZ 3. Sarasota, FL 4. Maui, HI 5. Cape Coral/Fort Myers, FL

Booking pace for each of the markets is trending significantly higher than in prior years."

High Revenue

Not surprisingly, Orlando is a lucrative market for short-term rentals. Airbnbs have an average monthly revenue of $2,609, and an average daily rate of $200. Compare this to Philadelphia, a historic, major city with plenty of tourist attractions: Philadelphia has average monthly revenue of $1,832 and an average daily rate of $153 (source: AirDNA). 

Cost of Buying a Home in Orlando

One of the advantages of buying rental property in Florida is the state’s relative affordability when it comes to home prices. The current median price for a home in Orlando is $345,541 according to Zillow - which represents a 25% increase from last year. 

“The Orlando housing market is, I’m sure, like every other market in the US. There is a shortage of supply of homes and greater demand,” says Hatcher.

Still, though, it’s only slightly higher than the U.S. average - $331,533 - despite Orlando being incredibly popular for both permanent residents and tourists. Interest rates are rising, so it's a good idea to start a conversation with an Orlando-based agent today - rather than waiting. 

• Resource: First Time Home Buyers in Orlando: Loans, Taxes, Neighborhoods and More

Florida is Increasingly Popular for “Live Anywhere” Remote Workers

The rise of remote work has led many people to rethink their living situations. Once they don’t need to physically work near their employer’s hub, living in a place like sunny, beautiful Florida year-round - or even for a season - becomes a lot more doable. The rise of remote work has helped Florida's population grow at a rate of twice the national average over the past decade (and more people means a consistent demand for housing!).

If you’re interested in renting out your property but don’t want to deal with the management and hassle of constant turnover, consider renting out for 1-3 month stays through the Airbnb platform. Longer-term stays allow you to have a consistent income stream, but you don't need to change the towels and deep clean the bedroom twice a week.

Drawbacks of Being an Airbnb Host

When you own an Airbnb property, you’re inherently dependent on two things: one, the legality of your rental arrangement, and two, the platform itself. If either thing goes south, you might find yourself with no revenue coming in - yet ongoing mortgage payments you need to make. 

Because Airbnb properties are especially popular in Florida, they often find themselves at odds with local regulators - and even the platform itself.

• On New Years Eve 2020, Airbnb blocked 1,200 rentals in Orlando alone in order to try and cut down on disruptive partying.
• When COVID-19 hit, Airbnb allowed thousands of guests to cancel without fee, regardless of their booking’s cancellation policy. Hosts were originally bearing the brunt of these cancellation bills, highlighting how little power homeowners sometimes have when problems arise.
• Washington County, FL placed a 6-month moratorium on issuing short-term rental licenses while they researched how to better regulate them in 2021. 
• As of 2022, Collier County in Naples, FL started requiring all short-term rental properties to provide a 24/7 contact person they could reach in the case of disruptive behavior.

While no one ordinance or regulation is likely to kill your business completely, it highlights the issue of reliance on these platforms. If you buy a home but then can’t rent it out for 6 months due to a pause on STR licensing, you might be either struggling to pay your mortgage or having to turn to long-term rental solutions, which won’t provide the same income stream you may have been relying on. There have also been instances of hosts losing their hosting privileges without a clear explanation from Airbnb, as well as stories of guests damaging property and Airbnb’s insurance not covering the cost of repairs - these are risks you take in entering the hospitality space.

One way to limit your risk is to be on multiple platforms, and even consider having a booking site of your own. This can be especially helpful for returning customers. 

What You Should Know Before Buying an Orlando STR Home

The Best Neighborhoods in Orlando for Investing

Proximity is often a top consideration for Airbnb and VRBO guests because someone temporarily visiting the city doesn’t want to spend an hour a day driving in and out - they’re often more willing to pay a premium for a direct, close route. So not surprisingly, Airbnbs in Downtown Orlando and Celebration (close to Disneyworld) are always good choices. 

“Orlando is a top destination for tourists and those seeking fun and adventures. Whether it's with family or friends, there are Airbnb rentals in the Orlando area that will fit everyone's needs. Some of the major neighborhoods that are common for Airbnb Rentals are Storey Lake Resort in Kissimmee, Champion Gates in Davenport, Reunion Resort in Kissimmee, & Solara Resort in Kissimmee,” explains Hatcher. “These neighborhoods offer some of the best amenities, excessive parking, and beautiful homes that are guaranteed to enhance your stay.”

For first-time Airbnb hosts, affordability is often a key consideration for their investment. “A ‘good value’ would be Storey Lake Resort in Kissimmee,” recommends Hatcher. “It's close to tons of attractions, offers great amenities both in the home and for the neighborhood, and the homes are immaculate.”

As you evaluate properties, keep in mind the amenities that guests to Florida are prioritizing.  According to Airbnb, top amenities searched for include: 

• Wifi
• Free parking
• A pool
• A jacuzzi
• A kitchen
• Air conditioning
• A washer

How to Invest in Airbnb: Make Sure Your Lender Knows 

There are a few things you need to know about your mortgage.

First, if you plan on using the rental income from your Airbnb to qualify for the mortgage, then you won’t be able to use the property as your primary residence. 

However, if you’re buying a home as a rental property rather than as a primary residence, your mortgage rate will be higher - typically in the range of .25% to .75%. While this might seem nominal on paper, it can add up to thousands of dollars over the lifetime of your loan - depending on the property. In all likelihood, it will mean paying $50-$150 more every month to your mortgage payment. 

For buying a home with an investment property loan, the lender will often require you to put 20% down (which isn’t necessary for a primary residence). 

Just make sure that you’re clear with your lender about how your home will be used - otherwise, this constitutes occupancy fraud.

Good Tool for Airbnb Hosts in Orlando Florida 

Bookmark this: We recommend using AirDNA in order to get a better overall view of the local STR market. It’s possible to view up-to-date information about the cancellation policies other local hosts set, as well as typical amenities offered, which will help give you a better understanding of what you need to offer in order to be a competitive property. 

"We offer a few tools which can be really useful for someone deciding whether to buy a vacation rental, such as the Rentalizer, which gives a projection for the performance of any address, and market analysis over the last three years, as well as future booking data which can give some clarity into the future," explains Parkin.

So, Is Buying a House in Orlando for Airbnb Right for You?

Make no mistake, an Airbnb property isn’t a source of passive income. Successfully managing a home for guests will involve an investment of time and require resources and constant communication. Done right, however, it can prove a viable way to make a living - or to add an additional stream of income to your pockets. 

“For anyone getting into short-term renting, I would suggest that you really understand what it is that you seek to get out of owning an STR property. Ensure that the property is in great condition, there are enough amenities in the neighborhood as well as in the home to keep the guests busy and entertained, and be sure to offer quick service if needed,” recommends Hatcher.

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For Further Reading

• Looking at a House For Sale in Orlando? 6 Things You Should Know
• Closing Costs in Florida: What Homebuyers Need to Know
• How to Buy a Home in an Overheated Market: 4 Strategies