A reader living outside of Florida shared their concerns about whether to hire a management company or manage their investment property in Orlando themselves. Given the distance, they felt that managing it directly would be practically impossible, but there are still important factors to consider before handing it over to a management company.

In order, there are three main points. First is the rental market level, second is property taxes and holding costs, and third is the actual net income when going through a management company. According to RentCafe, the average rent in Orlando is $1,812, which has decreased by 3.12 percent over the past year. A one-bedroom averages $1,409, while a two-bedroom is around $1,795. It's important to note that being near theme parks does not necessarily mean higher rent, as prices can vary significantly from $1,325 to $2,462 depending on the area.

Next, it's time to check property taxes. Orange County collects an average of 0.94 percent of the assessed value as property tax, meaning that for a home valued at $432,500, the annual property tax is around $3,227. The city of Orlando's millage rate has been frozen at 6.65 mills for 13 years, but when combined with county and school district funding, the total millage rate reaches 18.1 mills. The Homestead Exemption, which provides a $51,411 deduction, only applies to primary residences, so this must be factored in when calculating taxes for investment properties.

The third point is the actual amount left after going through a management company. Management fees typically range from 8 to 12 percent of the rent, and after deducting landlord insurance and maintenance reserves, which are about 1 percent of the property value, the net income is significantly reduced from the total rent. When managing from a distance, accepting this fee as a cost of convenience is realistic, but it is essential to compare estimates from at least two or three companies to understand their fee structures and service offerings.

Loan conditions are also an important factor to check. Investment properties require a down payment of 15 to 25 percent, which is higher than for primary residences, and a credit score of 740 or higher is needed to secure favorable interest rates. Lenders will only recognize up to 75 percent of expected rental income as income, so it's wise to calculate the loan limit in advance.

It's also necessary to check rental laws. Florida state law prohibits county and city rent control, meaning there is no rent cap in Orlando. This relatively simple rent increase process can work in favor of long-distance investors when dealing with management companies.

Properties near theme parks often target short-term rental demand, but short-term rentals come with much greater management burdens and may be subject to restrictions based on local government or HOA regulations. For long-distance investors, adopting a long-term rental strategy while carefully considering short-term rentals can help reduce management burdens.

When selecting a management company, it's advisable to check not only the fee rates but also the average time it takes to re-rent a property when vacancies occur, the tenant screening process, and whether monthly reports are provided. In long-distance situations, the effectiveness of information delivery can significantly impact the quality of management.

After loan approval, landlords must also separately obtain landlord insurance, which differs from standard homeowners insurance in terms of coverage, so this should be confirmed again.

Orlando is seeing an increase in tech companies and healthcare institutions alongside tourist demand, which is also strengthening the long-term rental market. For long-distance investors, it seems wise to consider this long-term demand in addition to relying solely on tourist demand. This trend can be consistently monitored through annual population influx statistics.

In summary, before deciding whether to hire a management company, it is essential to first check the rental market, property taxes, and the actual net income structure. This article does not constitute investment or legal advice, and it is recommended to consult with a real estate professional along with the management company contract before making any agreements.