Last updated on August 16th, 2023
Short Term Rental vs Long Term Rental in Orlando
Key Takeaways:
- For traditional landlords in Orlando who want to up their rental collection, short-term rentals are a way to go. But for it to work, Airbnb hosts also need to do their part. If you’re already a short-term rental operator, incorporating data analytics into your strategy will give you a ton of insights when it comes to charging a nightly rate.
Introduction
Pundits have declared that the 2023 recession is inevitable. As someone who owns one or several rental properties in Orlando, you are surely restrategizing to make the most out of your real estate investments. While Florida is declared generally safe from the upcoming recession, you may still be wondering how to make your rental property not just survive but thrive in this year’s economic climate. So, we’re here to guide you through.
Whether you own a short-term or long-term rental property in Orlando, this article is for you! We believe that economic analysts should not be the only people who have access to numbers. You too can make sound investment decisions in the upcoming recession by relying on easy-to-use data analytics.
Differences between Short Term Rental Vs Long Term Rental
Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.
On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals.
Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend. It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own.
If you’re interested in having another stream of income via real estate without spending a fortune, here’s everything you need to know about rental arbitrage in Orlando.
Rental Regulations in Orlando
Orlando Long-Term Rentals
Orlando has a newly enforced “Tenant Bill of Rights.” This bill aims to promote the well-being of tenants and protects them from any form of discrimination. It also requires landlords to provide a list of fees that tenants have to be paid upfront. These fees cannot be adjusted during the lease. It also mandates landlords to put 60 days’ notice before terminating the lease or increasing the rent by more than 5%.
Orlando Short-Term Rentals
Hosts have to secure a short-term rental permit for their Airbnb properties. They need to pay $275 for the first year and $100 for every succeeding year. You can register your property via this portal. The local government of Orlando will review your application and will get back to applicants in 3-4 business days.
Advantages of Long-Term Rentals in Orlando:
Below are the advantages of operating a long-term or traditional rental property in Orlando:
- Continuously growing population – Orlando’s 2023 population is 312,280, which grows annually at 0.5%. This number has increased by 1.52% since the last census.
- A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average monthly rent in Orlando is $2,192.
- Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.
- Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended.
Advantages of Short-Term Rentals in Orlando:
On the other hand, here are perks that short-term rentals can offer to Airbnb hosts in Orlando:
- Very low seasonality rate – Airbtics Dashboard shows that Orlando has a very seasonality rate of just 38%. This means that cash flow is just as stable and does not get affected by the changing events or seasons in Orlando.
- Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand.
- Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.
- Feel more control over the property – Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance.
Do you make more money on Airbnb or long-term rentals in Orlando?
According to Airbtics’ Data, you can earn more from an Airbnb in Orlando! As an example, a 1-bedroom property on E Michigan Street can generate a monthly rental income of $1,325 or $15,900 annually. That’s not really bad. However, Airbnb units with the same property size near the said area earn an average of $31,665 annually. They have a nightly rate of $88 and an occupancy rate of 81%.
Short-Term Rental Markets in Orlando
We already have an idea of short-term vs long-term rental income in Orlando. Airbnb is the way to go since it’s one of the top STR cities in the US. Orlando is already a rental market – and a very huge one at that. But what landlords do not know is Orlando can be broken down into smaller markets where you can monitor your closest competitors.
It just so happens that Airbtics has this innovation that allows users to create a Custom Market. From 970 Airbnb listings in Orlando, let us now dive deep into the top rental markets in the city and learn the best property features with the highest occupancy rate and corresponding annual revenue:
1. Lake Eola Heights
- Existing Airbnb listings: 30
- Average daily rate: $96
- Airbnb occupancy rate: 89%
- Airbnb annual revenue: $36,041
- Best property size: 1 bedroom
- Occupancy rate: 94%
- Annual revenue: $39,477
2. Lawsona – Fern Creek
- Existing Airbnb listings: 28
- Average daily rate: $101
- Airbnb occupancy rate: 81%
- Airbnb annual revenue: $35,062
- Best property size: 3 bedrooms
- Occupancy rate: 97%
- Annual revenue: $43,164
3. Lake Davis
- Existing Airbnb listings: 14
- Average daily rate:$93
- Airbnb occupancy rate: 78%
- Airbnb annual revenue: $31,672
- Best property size: 2 bedrooms
- Occupancy rate: 85%
- Annual revenue: $41,272
As you make use of the game-changing Airbtics Custom Market, feel free to draw your own “Orlando Rental Market” as it is not limited by geographical boundaries. The only limit, however, is showing you a maximum of 20,000 Airbnb listings within your own market.
Maximize Your Rental Income
Every investor wants to get the most out of their investment This is understandable because their capital can be a few hundred thousand to even a million dollars. Real estate investments can be a bit tricky since there’s really nothing much that you can do with the property. Instead, homeowners can strategize their rental business for their financial freedom to be unscathed in the upcoming economic recession. This can allow homeowners not only to keep but also increase their market rent in Orlando.
For traditional landlords who want to up their rental collection, short-term rentals are a way to go. But for it to work, Airbnb hosts also need to do their part. If you’re already a short-term rental operator, incorporating data analytics into your strategy will give you a ton of insights when it comes to charging a nightly rate. As we have seen, Airbtics can provide us with macro and micro views of rental markets for you to arrive at a data-driven decision!
Take your Airbnb to the next level, try this powerful Short-Term Rental Profit Calculator!
Be on Top of the Orlando Airbnb Market &
Make Your Property Investment Recession Ready!
