The vacation rental home market in Osceola County is on fire, according to the latest figures from Experience Kissimmee.
The county’s tourism authority said the market – mostly on the western side of the county – has grown 470 percent in the past four years to 22,000 homes, and is only expected to climb.
“We have a couple more thousand homes coming down the pipeline that are expected to open in the next 18 months,” said DT Minich, Experience Kissimmee’s chief executive officer and president.
The agency has trademarked its self-proclamation for Osceola as the “Vacation Home Capital of the World.”
“We verified that we have more vacation home products than any other county in the U.S., so we own that slogan,” Minich said. “Trademarked, we own that slogan.”
Vacation rental homes now make up 50 percent of lodging in Osceola County, he said.
“It’s not stealing anything away from our hotel product in Osceola, but I think it’s cutting into the market share in Orange County,” he said.
Airbnb, for example, recorded 640,000 guest stays in Osceola County in 2018, which brought in $82.6 million – twice as much as in Orange County. Osceola’s was the most desired destination in Florida except for Miami-Dade County, which brought in $204 million with 954,000 recorded stays.
The vacation home market in Osceola is strong because of the large swaths of undeveloped land whereas Orange is smaller and mostly developed.
“The other thing that sets us apart from Orange is ecotourism,” Minich said. “People want to do a couple of days at the parks and a couple of days outside of the parks. We offer the best of both worlds.”
Most of the 22,000 homes are located on the western side of the county and are managed by private companies, many of which advertise on Airbnb, Home Away and VRBO.
Neighborhoods designed specifically for vacation rentals – such as Encore Resort at Reunion and Margaritaville – are becoming the norm, Minich said. The developments typically are being built around a resort complex that has restaurants, concierge services and other amenities for vacationing families.
The average rental in Osceola is a luxury home with 4 to 10 bedrooms and a pool. A week’s stay in a six-bedroom house in Encore in July, during peak season, is about $4,900, according to Encore’s website.
Mega-mansions with 9 to 20 bedrooms, some decorated with elaborate themes, are also a hot commodity and a growing trend, Minich said. A nine-bedroom house that sleeps 28 guests runs about $18,900 for a week, according to Jeeves, a rental company that specializes in the more extravagant vacation rentals.
The owners of the 22,000 homes are a combination of domestic and foreign investors. The houses are marketed to buyers and customers in China, Brazil and the U.K., Minich said.
The agency educates international tour operators about the vacation home rental product, which keeps the homes booked and the demand high, he said.
Vacation rental homes are a boon for the county because they generate property and school taxes, but their short-term residents typically don’t use many county resources, he said.
What’s more, a local tourism tax is levied on each rental transaction. The county collected $27 million in tourism development taxes on vacation rental in 2018, according to Experience Kissimmee.
According to Vrbo, a vacation rental website, Central Florida homeowners earned an average of $1,350 to $2,600 a month in rental income. A company survey found that 50 percent of Vrbo owners said their rental income covers 75 percent of their mortgage.
The company said it’s already seeing a spike in demand for rentals in October during the Epcot International Food & Wine Festival, particularly in Kissimmee and Winter Park.
The growth in the vacation home rental market mirrors the boom in the “sharing economy,” the peer-to-peer business model based on selling access to goods and services through online platforms.