With 68 million visitors last year alone, Orlando represents something of a happy hunting ground for property investors looking for high year-round occupancy levels and rental income. But if you know where to look, you could manage to squeeze a little extra out of your investment and have a lot of fun into the bargain.
All work and no play…
It’s standard practice in property investment to strive to have paying tenants in place 365 days of the year; the void period is never popular with landlords.
But when the property is a de luxe 2 or 3-bedroom apartment in the Sunshine State, owners here in the UK, where the clocks have gone back and autumn has arrived with a shiver, could be forgiven a wistful fancy for a few days with the sun on their backs.
But it would be bad for business…or would it?
Owners, friends and family stay for free
Some serviced apartments in Orlando are destination resorts in their own right. They have self-contained onsite attractions like waterparks, lazy rivers and waterslides, and with their competitive, multiple occupancy room rates allowing a family of 6 to stay for a total of $250 per night, they’re in huge demand. Occupancy rates are way above average at 85% and, with Florida’s climate, there’s not a lot in the way of seasonality.
But, unusually for a managed commercial investment property, owners of these apartments are entitled to use them themselves whenever they wish at no extra charge.
Obviously this means that the apartment won’t be earning them income while they’re in it, but it does effectively mean a free holiday for 6 – which is ample compensation. All they’ll pay for is their flights and spending money; the apartment and the resort’s amenities are on the house.
And by planning ahead, and missing the well-publicised peak periods, owners can minimise the impact on their income by going when the resort is at its least busy.
Owner’s referral fee
The management of these apartments will also reward owners who refer paying guests with 10% of the total rental revenue generated by the booking. They see the benefit of referrals as part of both the resort’s overall marketing activity and that of the individual unit.
Owners receive their rental income every month, paid automatically into the account of their choice.
Given the location of these apartments, payments are made in US dollars.
It’s always good for an investor to have an income stream in another currency. The US dollar is the peg for so many other currencies, and a dollar account will allow investors around the world flexibility against fluctuations in their exchange rates.
James Harrington, Business Development Manager at Orlando investment specialists Emerging Property says investors are finding the personal usage idea appealing. “Most commercial property investments are strictly non-residential, so this is an unusual bonus. And when you look at what Orlando and Florida have to offer, it’s a great opportunity to treat the whole family to the trip of a lifetime without breaking the bank. Plus Orlando’s so easy to get to – why wouldn’t you?”