HOMES AWAY FROM HOME

WHEN A HOTEL JUST WON’T DO, A VACATION HOME IS JUST WHAT MANY LOCAL VISITORS ARE LOOKING FOR.

By Mick Lochridge

Look at it like this: A million of your closest friends and family are coming to visit you in Central Florida and they need a place to stay. Yes, there are plenty of hotel rooms. But your guests want something more out of their accommodations — more space to relax, more bathrooms, a real kitchen, outdoor activities. And, of course, they want to be close to the theme-park action.

Their solution can be as simple as a quick Internet search of “vacation-home rentals near Disney.” With a few keystrokes, they’ll step into an expanding universe of homebuilders, resort developers, property-management companies and U.S. and foreign second-home buyers who put their properties into a deepening rental pool. 

It’s a big and growing business in one of the most popular vacation destinations in the world.

“In total in Orlando there are estimated to be at least 20,000 second-home rental options, and the majority of them are in the Kissimmee area,” says Gary Kenny, the owner of Feltrim Group, an Orlando-based real estate development company that specializes in selling to overseas buyers, many of whom make their property available for vacation rentals.

“Every year we see a higher proportion of visitors opting to use their property to rent out,” adds Kenny.

And it’s a strategy that pays dividends, particularly for international owners who don’t have the opportunity to visit Central Florida as much as North American owners. So they maximize their rental income through Feltrim’s in-house property-management arm.  

“It’s also beneficial for the property to be in use rather than being left empty,” Kenny notes.

One of many local homebuilders with an eye toward the vacation-home market, Royal Oak Homes sees similar reasons for growing demand. 

“Europeans are coming over in droves, and the exchange rate is great, so it’s a wise investment,” says Nichola Selby, vacation-home sales adviser for Royal Oak. “Orlando is still the dream vacation destination, no matter what part of the world you’re from.”

Other motivators to buy a second home include reliable rental managers, home design, location and amenities that set the vacation home apart from a typical single-family residence. 

DEMAND IS RISING

Choices to buy and rent across the area range from studio-size condos to 15-bedroom luxury homes with private theaters, ensuite facilities, game rooms and bowling alleys. 

Some are in gated communities. Some have private pools, outdoor kitchens, grocery delivery and chefs for hire. 

New homes typically run between $150,000 and $500,000, not taking into account the occasional multimillion-dollar mansion. Rent can range from $100 to more than $2,000 a night, based on size and amenities. 

“Vacation-home visitors, like vacation-home owners, want safe, affordable family accommodations and aren’t worried or held back by having to pay more for such accommodations and added privacy,” says Denis Hanks, executive director of both the Florida Vacation Rental Managers Association and the Central Florida Vacation Rental Managers Association.

Both are industry membership organizations made up of vacation-rental property managers, attractions, vendors and tourism professionals. 

Just as there are plenty of residential choices, there are plenty of potential renters and buyers. Florida saw 54.1 million visitors during the first half of 2015, a record for any six-month period. 

It’s no secret that Central Florida, with its theme parks, great weather, beach proximity and outdoor recreation, is a strong magnet for both domestic and international travelers. 

As Kenny points out, Orlando attracts the lion’s share of Florida visitors, with a record 62 million-plus in 2014. “These figures are important for the holiday-home sector, because when visitor numbers are growing, so is the demand for real estate and vacation property,” he adds.

Demand for vacation homes has been rising ever since the U.S. economy began its steady recovery. “But it has really taken off in the last two years as the domestic and global economic situation strengthened and job growth began to improve, helping buyers to become more confident,” says Kenny.

The number of vacation homes in Florida has grown more than 12 percent in recent years, says Hanks, “with hundreds of new units coming online over the next few years.”

Today, he says, there are 10,000 vacation homes in Osceola County and 8,000 in neighboring Polk County.

Sylvia Oliande, communications director for Experience Kissimmee, notes that projects planned for Kissimmee point to an additional 5,000 homes over the next three to five years. 

“Our geographical location in Central Florida and easy access to the theme parks, Orlando International Airport and any place in Florida plays a big part in it,” she says.  

BUILDERS AND DEVELOPERS

Of course, before there are buyers and renters, there are developers and builders. Without them, there would be no burgeoning vacation-home business. 

A number of vacation-home communities dot the landscape along the highways through Osceola and Polk counties. As with the Feltrim developments, many have property-management services available for owners. 

Reunion Resort, a 2,300-acre development in Kissimmee, features several communities that include 260 villas and 50 private homes in its rental pool. Amenities including a 5-acre water park; several community pools; a full-service boutique spa; restaurants; and golf courses designed by Jack Nicklaus, Arnold Palmer and Tom Watson.

A typical renter at Reunion is usually a multigenerational family looking to stay a week or more. Rents range from about $1,300 a week to about $6,700 a month. Home prices start in the $150s.

“The trend of multigenerational travelers staying in Reunion Resort’s vacation rental homes has really begun to increase as more baby boomers reach retirement age and take more leisure vacations with their families,” says Kelli Robinson, public relations manager. 

Just a short drive from Osceola into Polk County, Minto Communities is building Festival on 200 acres in Davenport. When completed, it will have 500 luxury vacation villas in private, gated neighborhoods. They will cost from the mid-$200s to mid-$300s.

Festival’s town center will include restaurants, a resort-style pool, a kids’ water park, a fitness center and other recreational amenities.

Buyers value the luxury and privacy of having their own vacation home in an exclusive, gated resort community as well as the opportunity to generate income from leasing their villa, according to Minto Senior Vice President William Bullock.

“Our buyers, from the U.S. and abroad, will have the peace of mind of owning a vacation villa managed by a leading property-management company, and the option of placing their villa in an international vacation-rental program,” he says.

Another builder, D.R. Horton, entered the vacation-home market in the early 2000s because of high demand. The company has built more than 100 vacation homes in the past 18 months.

Currently D.R. Horton is building homes in the Solterra Resort community in Polk County, with prices from the $290s to the $420s. It builds both townhomes and single-family residences.

“The demand for vacation homes is on the rise,” says Donna Pope, D.R. Horton’s Orlando division president. “More people are seeking the benefits in owning a vacation home near Walt Disney World and other well known Florida attractions.” 

Townhomes are an increasingly popular option for vacation homebuyers with more modest budgets, she adds.

Royal Oak Homes entered the vacation-home market in early 2015 and expects to build more than 100 homes within the next two years. 

With homes in the Marbella and Aldea Reserve developments in Polk County, the company’s target buyers are Europeans and Canadians, according to Selby. Prices range from the mid-$200s to the low $300s.

Selby explains the appeal of a vacation home: “Vacation homes are turnkey. Everything is done for you, so no stress. Just arrive with your bathing suit and enjoy your private pool home. You don’t even have to worry about taking care of the yard, because that’s covered by the HOA.”

About 50 percent of Florida tourists stay in non-hotel lodging, says Hanks. And the entire local economy — not just individual builders and tourist attractions — enjoys the benefit. Most of the money spent on the vacation-home market, from construction to rental-management companies to taxes, stays in Central Florida. 

“The vacation-rental industry in Florida,” Hanks says, “is a huge economic engine benefiting small business and residents with jobs and taxes like no other sector.”