On-line Travel Agent (OTA) and Portal sites push rates even lower.

As more owners come into the market, desperate to generate bookings, they drop the prices further as they have (generally) no other alternative to be competitive.

The increased number of homes means more competition, depressing rates further.

Less nightly rental revenue makes it harder to generate enough revenue to cover your costs. Our own rental rates have fallen over 25% in the last 20 years as the supply has increased. In order to get bookings, prices are either stagnant or falling.

The over-supply is depressing nightly rates.

With just over 30 million guests, there are too many rooms for the number of guests arriving.

There are in excess of 425,000 rooms in central Florida (hotels and vacation homes), each sleeping 2 guests. The first and most obvious is that supply is outstripping demand.Here’s the “ dirty little secret” that realtors and builders don’t want to tell you…Vacation rentals in Orlando are not a cash-flow positive investment for many (cascading) reasons. At that point, the equity growth can also be used to calculate the final return on investment. If you bought shares on the stock market and took out a loan to pay for them, then the loan and its interest wouldn’t be a part of your return calculation! Instead, the mortgage and interests is usually included in the overall investment return after you sell the property. It’s important that you (the owner) recognizes that mortgage interest costs should not be included in your calculation of return on investment. While the overall investment cycle in a vacation rental in Orlando will typically return a positive investment, the operating cash-flow may be negative during months where occupancy is lower. As the market has expanded, many purchasers now see an Orlando vacation rental as an investment which should provide a return. In the past, most buyers bought a vacation rental on the understanding that the income from rentals would pay towards the operating costs. Choosing the right location to invest in a vacation rental property is critical to the success of the purchase and return.

Occupancy and returns on vacation rentals in the Orlando area vary based on many factors. The factors and importance of occupancy and returns

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