Orlando is home to Disney World, Universal Studios Florida, SeaWorld Orlando and a host of other popular tourist sites. In other words, it’s a major vacation destination.
But despite the constant influx of travelers, only 17 percent of the real estate agents in the Orlando market have ever sold a vacation rental, according to Erica Muller, CEO of vacation rental marketplace company Vrolio. More surprisingly still, Muller said Thursday at Inman Connect Las Vegas that when it comes to agents doing more than $600,000 in vacation rental sales volume, the percent drops to 1.7 percent.
“There’s less than 100 agents,” Muller said of the number of real estate pros doing significant volume of vacation rentals in Orlando.
Muller, who was speaking during a Connect panel dubbed “Someday we”ll all be on vacation,” said that these numbers mean there is a tremendous opportunity for additional agents to get into the vacation rental market. She specifically estimated that there is “enough volume to go around for at least 50 percent of the market,” but also noted that agents who want to jump into the world of short-term rentals need to develop a very specific set of skills.
“When they go to sell these homes,” Muller explained of short-term rental sellers, “they’re seeking out agents who have the specialty knowledge of selling income producing properties.”
Among the things agents who focus on vacation rentals need to understand is property management. Muller pointed out that some owners have managers, and that those managers may own or control the property’s books. When a new owner comes in, they may want to switch managers or take over themselves, but if they can’t get the books — which include information on things like vacancy and profitability — the transition may not go smoothly.
Agents, then, need to anticipate this type of issue and help their clients work through it.
“That’s a massively overlooked piece,” Muller added.
Shaun Greer, senior director of real estate for vacation rental company Vacasa, spoke on the same panel Thursday and said that sellers should also be prepared to hand over photos, guest emails, reviews and other information that show how a property is being used. The idea, Greer added, is to “keep the revenue going when you go through a transition.”
Agents who want to succeed, then, will help their buyers and sellers smoothly transfer this kind of information from one owner to the next.
“You need to think of the amenities and the environment of the property,” Greer also recommended.
And of course, agents need to help their clients create a profit. Greer said that Vacasa conducted a study and found that 60 percent of investors are more concerned with revenue than with a short-term rental’s location or with finding a property that fits their own needs.
Profitability sounds like an obvious area of focus. But agents who have otherwise specialized in primary residence clients may still be unaccustomed to de-prioritizing conventional amenities in favor of working out the numbers on how much cash a property can generate over several months or years.
“There’s a lot of things that you might not think about that are not involved on a residential sale,” Muller added.
Agents who figure out how to help clients make a profit will be rewarded with a larger pipeline of future business, Muller argued.
Greer further pointed out that there “is $7 to $8 billion in commission revenue each year” from the short-term rental sales market, meaning that there is a ton of money pouring into the sector and agents stand to earn a piece of that pie. The potential, in other words, is huge.
But whether they get onboard or not, the vacation rental industry is heating up and the only question is who will make money from it.
“I wish more agents knew what was out there and took it seriously,” Muller said, “because it’s happening with or without them.”