What is an Orlando Villa? I had this question asked of me the other day. I went to Webster's dictionary to search the word villa and here is what I found:
A Villa is a country estate or a suburban residence of a wealthy person. The British definition is a detached urban residence with a yard or garden space.
this as a backdrop, I think the British definition will suffice for this article
especially when we speak of Orlando Villas. Here we are talking about detached
homes with yards and private pools. With many of these homes costing their investor-owners
upwards of $600,000, one might assume that Webster was onto something as he
said "a residence of a wealthy person."
Back in the late eighties and early nineties Brits looking to vacation in Orlando and central Florida introduced the concept of renting detached homes for their holiday.
We can understand this concept noting that visitors from the UK do not vacation like those of us in the states. When they come to our market, they visit for two or three weeks at a time. When looking at the lodging choices of being cramped in a tiny hotel room with the entire family for that length of time one can readily admit this doesn't seem to be very pleasing at all.
Since investors from the UK stepped forward to become home owners, we get an understanding of how the industry was birthed.
To add to our story, we find that from the late 1990's, Orlando and especially that area around Disney World experienced unbelievable increases in housing values. Homes which were purchased for $300,000 in five years were selling at well over $600,000. This helped fuel the bonanza of growth in this industry.
In the period from 2003 to 2007 the rapid growth in housing values continued at even a faster clip. The reason was our government relaxed the lending requirements for investors seeking mortgages for second homes. Further, mortgage rates for second homes were pushed down to where the purchase of a villa in Orlando was most attractive.
Not many of the investors were too concerned about the lack of rental activity for their rental villas in Orlando. They were looking for the vast capital gains that all had experienced over the past twelve years. They fully expected those to continue when investing in Orlando Villas.
as we all know the housing bubble burst, home values especially in these markets
started to drop precipitously. With the over capacity in rental villas in Orlando,
Florida and with the majority of investors having adjustable rate mortgages,
many of these Orlando villa investors found themselves squarely behind the eight
Interestingly enough those investors from overseas had little to fear. They found
early on that the banks and lending institutions had so much in the way of non
performing real estate loans on their books that they were not going after citizens
or investors of foreign countries. As one would understand, this exacerbated the
issue such that today 30% of all Orlando villas are in varying stages of foreclosure.
Most of these homes were constructed between 2003 to late 2007.
Now, let's look at the good side of the industry and what this might mean to you. Since 2002, Americans have discovered what the Brits knew all along... renting one of these vacation villas in Orlando was is still a most attractive lodging option. Thus, the interest in Orlando Villas as a loding option continues to do well in the states.
They found the added space in one of these villas in Orlando was four to 7 times the size of a normal hotel room makes for a most enjoyable vacation experience. The kids are not under foot, everyone has their own space, and the vacation is more stress free. Further, when the domestic clients experienced a vacation with their own private pool, well this was ideal for his family.
Taking it one step further... with so many short term vacation villas in Orlando, upwards to 30,000 at its peak, one can imagine why the nightly rates had to drop to bring in much needed cash flow to the investor to assist in making the monthly mortgage payment. Carrying it one step further, with so many villas in Orlando, Florida being foreclosed upon and ultimately being sold at auction for far less than what they were sold for originally, the new nightly rental rates seem to be attractive enough to the new home owner to make up most if not all of his mortgage payments.
summarize... the bursting of the housing bubble that started in 2008 hit the
Orlando villa market hard. Over supply was rampant in this industry that had
just sprung up some 15 years earlier. Investors didn't seem to care about the
rental of his Orlando villa was sporadic at best. Everyone had their eye on
the vast capital gains achieved over the last 12 to 15 years. Construction of
vacation villas in Orlando was at a feverish pace so much so that it was estimated
that at its height, 2006, it was estimated that every business day over 100
Orlando Villas were completed and ready to be sold.
Now, that the construction boom has come to an absolute halt, foreclosures of existing Orlando villas or vacation homes are at 30%, and rental rates for these lovely properties are dropping because of the anemic economy, it is a fabulous time to visit Orlando and acquire these below wholesale nightly rates for a fabulous Orlando villa. You will find to rent a lovely home in the Disney world market, you can accomplish that for some 60 to 75% of what you would pay for a four star hotel.
Do yourself a favor... if you are looking to vacation in Orlando, Florida and experience the best of Disney World, then check out the unique opportunity that is yours by renting your own Orlando villa with private pool... you and your entire family will find it will enhance an already great time. Orlando villas are certainly one of the best values on the vacation market today!
Call 1.800.641.4008 to book one of our Orlando Villas today!