PAM’S GUIDE TO RENTING OUT A FLORIDA VILLA

If you are considering buying an investment property in the Orlando area, with a view to renting it out, you are probably wondering what is involved.

Dave and Jody Baker have asked me, Pam Hull, to write something for their website in this respect, having been a villa owner.  I hope the following will be useful to you and will answer some of the many questions you may have.

First of all, some background about the family and our villa story

We are Pam and David Hull from Kent in the South-East of England and we have two teenage sons, Sam and Ben.

At the beginning of 2004, we decided to invest in a holiday home in Florida, one that we could use ourselves, and which we could also rent out for other people to enjoy in order to earn an income to pay the bills.

We made the decision to go for a re-sale house, rather than new, as we wanted to be up-and-running as quickly as possible.

With Dave and Jody’s help, we found the ideal house on Eagle Pointe, an established quiet development about 12 minutes from the gates of Disney World. 

The house overlooked a beautiful lake at the rear and came with its own private swimming pool.  The 4 bedroom/2 bathroom house was fully furnished and already set-up as a short-term rental (STR) property by the previous owners.  As an added bonus, there were some future rental bookings in place, which could be transferred to us provided we stayed with the same management company.  On 1^st June, 2004 we became the proud owners of our own piece of Florida sunshine!

We decided that we wanted to generate our own bookings as much as possible, but having the existing bookings transferred to us gave us a head start while we arranged our own website and advertising.

Although the management company were able to secure a number of bookings for our villa, they were at quite low rates, compared to the rates we were able to get ourselves.  After about 6 months, once our own bookings were starting to increase, we decided to change management companies.  Following a recommendation from another villa owner, we changed to a much smaller family-run company who only looked after houses on Eagle Pointe and a few other neighbouring developments.  They also arranged bookings and, although less in number, they were at higher rates, as they did not deal with tour operators.

During the latter part of 2005, we very reluctantly made the decision to sell our villa, because we needed to raise some money for other projects in the UK.  Thanks to Dave and Jody’s help again, we managed to secure a good sale, which completed at the end of December 2005 and which returned a decent profit.

Our 18 months of villa ownership were quite successful, having generated more than 33 weeks of bookings during the year of 2005 alone.  (In fact, we probably could have obtained more bookings, but we wanted to use the villa ourselves at some of the peak times during the year.)  The bookings have to be worked at (they do not just land in your lap), but we found owning a villa to be very enjoyable and rewarding and what’s more, we got to stay there a few times ourselves!

The following information is gained from our experience as villa owners, along with some other details we have picked-up along the way.

Getting Bookings

Some owners rely solely on their management company to get bookings for them.  However, although a fair number of bookings can be obtained this way, they will mainly be from tour operators and the owners will have no idea who is actually staying in their house.  Commission will be payable to both the tour operator and the management company, which means that the amount  received by the owner is considerably less than if the bookings were obtained direct with the guests.

Therefore, in order to maximise your rental income, it is advisable to try and get as many bookings yourself and, in addition, you will also know who is staying in your property.  The guests will also get to know you and, by doing so, are more likely to take good care of the house.  Having said that, management company bookings can still be useful to help fill any gaps you may have.

In order to get your own bookings you will need to have your own website with photographs and details of your house, clear rates (in GB£ and US$) and information about the area.  The photographs need to be of a good quality, as these are what prospective guests will look at first.  If they like what they see, they will then go on to read further.

Deciding on what rates to charge is difficult, but you could have a look at several adverts of properties similar to yours to get some idea of what other owners are charging.

Once you have got a website up and running (or even before), you need to let people know about your villa.  The following is a list of some suggestions:-

Advertise in local newspapers/parish magazines.

Place an advert in shop windows.

Get flyers printed and display in your rear car windows.

Put posters up at your workplace.

Get business cards printed to carry with you.

Tell friends and family.

Some people do not have access to the internet, so it is useful to have a printed brochure available to send in the post to them in these instances.

The internet is a great way to advertise and you may find that the majority of your bookings will come from people seeing your villa online.

There are many villa rental websites that owners can advertise on.  Some charge an annual fee, others charge commission for each booking generated and some offer free trials ranging from one month to a year.  In addition, some are geared more towards the UK market and some towards the US/international market.  To get an idea of what is available, go to the search engines and type in something as if you were looking for a place to stay and see which sites appear on the first few pages.

Please bear in mind that what works for one owner will not necessarily work for another – you will need to experiment to see what works best for you.

Some rental enquiries will come by telephone and some by e-mail.  When answering e-mail enquiries, try to reply as promptly as possible.  Keep your replies short and sweet, but include the total price for their requested dates, a link to your own website and a short description about the villa as well – this is your chance to sell it!

Do not feel disheartened if the first enquiries do not result in bookings.  Prospective guests will probably be asking about other villas as well as yours.  You may need to answer a lot of enquiries in order to secure a booking.  Keep plugging away and the bookings should come.

Now, for some figures

Below is an example of annual income and running costs I have put together, in US dollars, based on our actual figures for 2005, just to give you some idea.  This is for a 4 bed/2 bath re-sale villa with its own pool in Kissimmee, in Osceola County, with 33 weeks rented at an average of £500 per week.

Please note that this does not include mortgage payments and capital expenses (furniture, appliances, furnishings etc.)