Kissimmee Real Estate Changes Direction
by Denis at HR on 2007-09-22
Kissimmee, Florida, has for many years been the hub of the Walt Disney World area vacation home business. In and around Kissimmee, and the neighboring cities of Davenport, Haines City and Clermont, you will find upwards of 18,000 homes that are used solely as short term rental homes. Each home is licensed by the county for short term use, and most are owned as investment properties by absentee owners - many based overseas.
But now the Kissimmee Real Estate market is starting to see a major change of direction. Owners of vacation homes are feeling the pinch, as it becomes more and more difficult to fill bookings calendars in the face of increasing competition from new STR licensed homes. Rental rates are down, and occupancy rates are falling, too. The solution for many owners is to put their home on the market and to take the profit resulting from rising house prices in the area, which have increased by more than 50%. But this presents a problem. If the investment value of an STR home is conspicuously decreasing, who will buy?
The answer lies in another major trend in Central Florida's housing market - the increasing demand for residential properties. It is predicted that the area, and in particular Osceola County, will require 35,000 additional homes each year for several years to meet the demand for homes for the thousands of new residents that are flooding into Central Florida every week. In a classic 'swings and roundabouts' situation, the fallout from the short term vacation rental market will be taken up by the demand for more residential properties.
This will only work for a particular seller, though, if he is aware of the need to promote his home outside the STR market. Too many sellers are still thinking 'inside the box', and listing their home as a vacation property, emphasising, for example, that it is fully furnished and equipped for rentals, and that there are advance bookings in place. This doesn't help bring it to the attention of a buyer who is looking for somewhere to live, as he probably already has a home-ful of furniture and doesn't want to accommodate vacation renters after closing.
At Hightower Realty we encourage sellers of homes that are currently in the short term rental market to think about the broader market that is available to them now, to be prepared to be flexible in whether they sell the home furnished or strip it out first, and to consider re-housing any advance rental bookings that they have in place. Then everyone wins - the seller has immediately doubled the market potential for his home, and buyers have a clearer view of what would be a good property for them if it didn't come with unwanted 'baggage'.
But now the Kissimmee Real Estate market is starting to see a major change of direction. Owners of vacation homes are feeling the pinch, as it becomes more and more difficult to fill bookings calendars in the face of increasing competition from new STR licensed homes. Rental rates are down, and occupancy rates are falling, too. The solution for many owners is to put their home on the market and to take the profit resulting from rising house prices in the area, which have increased by more than 50%. But this presents a problem. If the investment value of an STR home is conspicuously decreasing, who will buy?
The answer lies in another major trend in Central Florida's housing market - the increasing demand for residential properties. It is predicted that the area, and in particular Osceola County, will require 35,000 additional homes each year for several years to meet the demand for homes for the thousands of new residents that are flooding into Central Florida every week. In a classic 'swings and roundabouts' situation, the fallout from the short term vacation rental market will be taken up by the demand for more residential properties.
This will only work for a particular seller, though, if he is aware of the need to promote his home outside the STR market. Too many sellers are still thinking 'inside the box', and listing their home as a vacation property, emphasising, for example, that it is fully furnished and equipped for rentals, and that there are advance bookings in place. This doesn't help bring it to the attention of a buyer who is looking for somewhere to live, as he probably already has a home-ful of furniture and doesn't want to accommodate vacation renters after closing.
At Hightower Realty we encourage sellers of homes that are currently in the short term rental market to think about the broader market that is available to them now, to be prepared to be flexible in whether they sell the home furnished or strip it out first, and to consider re-housing any advance rental bookings that they have in place. Then everyone wins - the seller has immediately doubled the market potential for his home, and buyers have a clearer view of what would be a good property for them if it didn't come with unwanted 'baggage'.
About The Author: Denis Le Marchant-Smith is the owner/broker of Kissimmee real estate company Hightower Realty. A member of the National Association of Realtors, Denis has been actively involved in the short term vacation rental market in Central Florida for several years. Hightower Realty's website is at here