Tuesday, April 14, 2009

An Orlando home, Florida vacation homes and other temptations

Ok, just imagine it - you and your family are sat in the sun on the pool deck of your Orlando home, one of the many Florida vacation homes close to the Disney World empire and one that has every comfort of your own home. Lots of space to relax, the pool to help you cool off when it's too hot, and the sky above is blue.

All the entertainment you need is a few miles away at the Disney theme parks or Sea World or wherever. And when you just want to chill out, your Orlando home is great, far better than a hotel or motel could ever be.

You've visited Florida regularly and this vacation home idea is a great way to deal with the accommodation part of your Orlando vacation package. How lucky the people who own these homes are!

Then you chat to your neighbor - he's from out of town but he owns the house next to your rental home. He's from Wisconsin or Michigan or Toronto and he visits half a dozen times a year, especially during Fall and Winter, to escape the cold weather and to enjoy the warm climate. When he's not in town he covers his costs by renting out the property to people like you - families who flock to Disney all year round.

And then you have a conversation in the restaurant with a guy who just happens to be a real estate expert. He tells you about the local property market - prices are lower than ever, bargains are everywhere, prices are bound to go up as the real estate market recovers and yes, you can cover your costs by renting the place out on a short term rental basis.

It makes far more sense than risking your money in a 401K that's now a 201K and could soon be a 4K. He can take you out tomorrow and find just the right place for you - a home in the sun whenever you want to use it and a great investment. Thousands of people do it, so why be dumb and miss out on the chance? You'd be crazy to miss out, wouldn't you?

Well, just hold on a minute.

Maybe you would and maybe you wouldn't.

Spend a little time considering the "pros" and the "cons" carefully and then decide. Don't be hurried into a decision because it could be costly.

And owning is not for everyone - renting may be better.

So first of all the "pros":
  • Early 2009 is definitely a good time to buy because prices are lower than they have been for many years. There is a great deal of choice in some very nice single family homes and condos. The likelihood of price appreciation is high over the next few years.
  • Owning an Orlando home is indeed a great way to enjoy a Florida vacation - more space, more flexibility, eat in or eat out as you prefer, avoid crowded hotel pools, just behave as if you were in your own home. Which you would be if you bought one!
  • You can take more frequent Florida vacations because once you buy, most of the costs are fixed. You have travel costs and maybe car hire to pay for but then it's virtually the same expenses as at home.
  • You can indeed cover some or all of the costs of ownership by renting out short-term to other Orlando vacation fans.
  • If you ever get tired of vacationing in your Orlando home, you can use it as a house exchange with people all over the USA and even the rest of the world. There are well-developed organizations and web sites who specialize in putting home owners from different states and countries in touch with each other for a mutually beneficial swap of accommodation. Orlando is a big attraction worldwide - so how do you feel about a trip to Europe or Asia in exchange for a couple of weeks in your Orlando home?
But how about those cons:
  • Yes, costs are fixed, and that's one of the problems. If you need a loan to buy the place, you're signing up for the monthly payment plus the property taxes and running costs no matter what. So don't over-extend yourself, like so many have over the past couple of years.
  • Capital appreciation is likely but not a certainty. Some experts think that we are near to the bottom of the market, but others believe there is more to go yet.
  • You can definitely cover some or all of your costs by renting out your Orlando home. The Florida vacation rentals market is large and even expanding. But it is also competitive and prices are under pressure. Understand that if you do depend on rental income to make your dream home a reality, you are taking on a lot of work and effecitively starting a new busines alongside that Orlando home.
  • Part of your commitment when you buy a vacation home is to keep up with the maintenance (unless you're not bothered about the state of decay it will rapidly fall into). That includes pool and yard maintenance as well as internal and external property maintenance. You will need someone to handle check ins and provide customer service if you rent out. All of that usually means hiring a property management company. There are lots of them, but some are not as efficient or trustworthy as others - how do you find the right one?
  • Are you able to cope with the stress of being an absentee owner and even an absentee landlord? Some families can't bear the thought of having strangers in their home and sleeping in their beds - even if it's their vacation home. Some owners find that the strain of dealing with property problems from hundreds of miles away completely offsets the joy of owning a place in the sun. How about you?
Do the pluses outweigh the minuses for you?

If they do, give some serious thought to buying your own Orlando home.

If they don't, or if you're in any doubt, then it may be that you should take advantage of the very many Florida vacation homes that are already on offer by continuing to rent as part of your Orlando vacation package.

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Update: Just in case you're still looking for more thoughts and ideas for your vacation planning, try these Orlando holiday villas, Florida short term rentals and Orlando vacation package postings.

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