Purchasing holiday homes in Orlando became a trend, especially among foreigners, specifically Brazilians, British, Venezuelans and Russians.
Of course, those who purchase a vacation home in a condo in Orlando don't not intend to live in the house, but just use it for a few weeks out of the year. The problem that occurs is that, in addition to money spent on the purchase and furnishing of the house, the monthly expenses are quite high for a house hat will be empty most of the year.
So the inevitable has to happen: put the house for rent.
There are several agencies in Orlando and Kissimmee managing seasonal rent for foreign owners. It seems a natural solution so that you can write off some costs to keep the house closed. So the idea is to rent the house off season so that you can use it with your family during the high season.
Then the disappointments begin.
First, it is much easier, and with higher prices, to rent during the high season, just when you want to use the house with your family. The solution then is to rent the house in the low season, with lower rates and the high vacancy, or down time.
Second: The agency rents his house and delivers the key to the tenant. What happens after that is at your own risk. What happens in most cases is you rent the house for 6 people, but tenants appear in groups of 10, 15, 20 people. There is no control of who enters or exits a condominium. When this happens, heavy cleaning and repairs will be needed to put the house back in good condition.
You expect to receive your rent check for a certain amount, but it comes much lower than anticipated. There are cleanings and repairs deducted.
In the end, with the low rates, you almost rented the house for free, and your expenses to maintain it were not covered.
According to data released by official agencies, there are close to 17,000 holiday homes being rented in Orlando and Kissimmee.
According to data from the American Resort Development Association, or ARDA, more than 1.5 million families own a timeshare in the Orlando area.
It's almost 100 times more.
Of course it can be argued that because the price difference is large between a timeshare and a vacation home, there is this disparity. A timeshare in Orlando costs between 15 and 30 thousand dollars, while a holiday home costs more than $ 200,000.
But even so, the difference is very large. According to an ARDA study, the typical US timeshare owner is upper middle class and upper class, with an annual salary of more than $ 100,000, between the ages of 35 to 50 years old. This means that most timeshare owners could afford to buy a vacation home in Orlando.
So why the Americans are buying more timeshares than holiday homes?
Timeshare, holiday ownership, or vacation ownership, as it is also known, can offer the following advantages over the holiday home:
- No need to worry about cleaning or maintenance.
- No need to deal with rental agencies and tenants.
- You do not need the rental income to pay the expenses.
- Not restricted to Orlando
Regarding this last item: one of the advantages of the timeshare is to use the exchange and travel anywhere in the world staying at accommodations similar to yours, without paying the hotels. With the holiday home, you are either forced to always go to the same place because you already have the house, or pay double: pay the cost of your home and pay for the hotels.
Why then so many foreigners prefer a vacation home instead of a timeshare?
Besides the hope of real estate valuation, which is somewhat dubious in Orlando, given not only the large supply in the secondary market, but mainly the large supply of new homes that come up to the market every year, many foreigners do not believe in the timeshare system.
In several countries there is no legislation requiring management companies to maintain reserve accounts for future expenses. What happens then is the natural degradation of the property. When it becomes necessary to repair and replace, the cost charged to each owner is so high that no one would be willing to pay and the property decays.
Some new foreign projects, in countries like Brazil, for example, are doing timeshare plans of 10 or 15 years. It appears to be more reliable to the local customers.
In the USA, the management entities, on behalf of the homeowners associations, maintain reserve accounts for renovations, paintings, furniture and appliances replacement. This ensures that the property is always be in order.
The second reason is the bad name that is still carried from the 70s and 80s, when many projects were really bad, being sold under a lot of pressure, and with an exchange program that did not work as promised.
If you have this preconception, look again to the industry. Today you will find hotels and resorts of the best hotel companies in the industry, such as Hilton, Sheraton, Hyatt, Disney, among others, and the exchange companies have developed systems that actually work.
Research the industry and you will understand why the 1.5 million compared to the 17 thousand.
To learn more about timeshare, or holiday ownership, visit Signum Orlando.