Choosing the right investment market near Disney World can make or break your vacation rental portfolio. With Orlando’s median home prices hitting $398,800, Kissimmee offering affordable entry points at $320,000, and Davenport emerging as a value play, smart investors need concrete data to guide their decisions.
This comprehensive analysis examines three powerhouse markets that consistently attract millions of tourists annually. We’ll break down rental yields, occupancy rates, appreciation trends, and investment strategies to help you maximize your returns in Central Florida’s competitive landscape.
Market Overview: The Numbers That Matter
Central Florida’s vacation rental market continues to outperform national averages, but each city offers distinct advantages for different investment strategies. Here’s how the three markets stack up:
| Market Factor | Orlando | Kissimmee | Davenport |
| Median Home Price | $398,800 | $320,000 | $322,000 |
| Gross Rental Yield (STR) | 5-9% | 11.9% | 8-10%+ |
| Average STR Occupancy | 55-65% | 51-67% | 50-60% |
| Annual STR Revenue | $35K-$70K+ | $41K-$44K+ | $30K-$60K+ |
| Property Tax Rate | ~0.9% | ~0.82% | ~0.9% |
| Tourism Volume | 75M+ visitors | 10.4M visitors | Disney spillover |
Orlando: The Balanced Growth Champion
Orlando’s reputation extends far beyond theme parks. With 76,000 new residents added in 2024 and job growth spanning technology, healthcare, and professional services, the market offers stability that pure tourism destinations can’t match.
Investment Performance Highlights
The city’s diversified economy creates multiple tenant pools for your investment properties. Young professionals working in the growing tech sector, medical personnel at world-class hospitals, and university students provide steady long-term rental demand alongside vacation rental opportunities.
Rental Yield Breakdown:
- 1-bedroom apartments: 10.19% gross yield
- 2-bedroom apartments: 9.62% gross yield
- 3-bedroom homes: 7.38% gross yield
- 4+ bedroom homes: 5.34% gross yield
Occupancy rates consistently exceed 92% for multifamily properties, with premium single-family rentals often reaching 95% occupancy in high-demand neighborhoods like Lake Nona and Winter Park.
Strategic Advantages
Orlando’s strength lies in its economic resilience. When tourism fluctuates, the diverse job market maintains rental demand. The city added 37,500 jobs in the past year alone, keeping unemployment below national averages at 3.6-3.8%.
For investors seeking appreciation potential, select Orlando neighborhoods have delivered 2-8% annual growth, with premium areas consistently outperforming citywide averages due to limited inventory and high-earning demographics.
Investment Considerations
Higher entry costs require careful yield analysis, but Orlando’s liquidity and stability make it ideal for investors prioritizing capital preservation alongside income generation. Insurance costs are rising across Florida, but Orlando’s infrastructure and emergency preparedness often translate to more competitive rates than coastal alternatives.
Kissimmee: The Vacation Rental Powerhouse
Positioned as Disney’s gateway city, Kissimmee delivers some of the nation’s highest short-term rental yields. With over 10,000 active Airbnbs and resort communities designed specifically for vacation rentals, this market caters to serious STR investors.
Performance Metrics That Impress
Kissimmee’s average STR gross yield of 11.87% leads our comparison, with annual revenue averaging $41,000-$44,000 per property. Peak season occupancy rates reach 69%, with top-performing neighborhoods like Hunters Creek achieving 78% occupancy.
Seasonal Revenue Patterns:
- Peak season ADR: $169-$300+ per night
- High season occupancy: 67-78%
- Off-season occupancy: 51%
- Annual revenue range: $41K-$44K average
The city’s proximity to Disney World creates unmatched demand from families seeking week-long vacation stays. International visitors from Canada, the UK, and Brazil particularly favor Kissimmee’s resort-style communities with pools, clubhouses, and family amenities.
Market Dynamics
Resort communities like Storey Lake, Reunion, and Windsor Hills maintain pricing power even during market corrections. These developments offer turnkey vacation rental properties with professional management services, reducing operational complexity for out-of-state investors.
However, success requires strategic property selection and active revenue management. The market’s seasonality means optimizing pricing during peak periods (March-April, summer months) while maintaining competitive rates during slower periods.
Regulatory Environment
Kissimmee remains STR-friendly compared to other Florida markets, though investors must navigate:
- City and county licensing requirements
- 13.5% cumulative tax rate on STR stays
- HOA restrictions in certain communities
- Zoning compliance in designated districts
Davenport: The Emerging Value Play
Davenport represents the sweet spot for yield-focused investors seeking affordable entry points with strong growth potential. Located 15-25 minutes from Disney, the city offers resort amenities without Kissimmee’s premium pricing.
Value Proposition Analysis
With median prices around $322,000-$375,000, Davenport delivers 8-10%+ gross yields while maintaining lower operational costs than competing markets. New resort communities like Champions Gate and Solterra provide modern amenities that command premium vacation rental rates.
Investment Advantages:
- Lower entry costs enable higher cash-on-cash returns
- Newer construction reduces maintenance expenses
- Growing infrastructure attracts long-term residents
- Less tourist congestion than the Kissimmee core
The city’s rapid 42% population growth from 2020-2024 reflects its emerging status as families and retirees seek affordable alternatives to higher-priced Orlando and Kissimmee markets.
Growth Catalysts
Major infrastructure investments, including new schools, medical centers, and shopping developments, support both vacation rental demand and long-term resident attraction. The area benefits from Orlando metropolitan expansion while maintaining competitive pricing.
Davenport’s resort communities often feature lower HOA fees ($100-$400 monthly) compared to Kissimmee equivalents, improving net cash flow for investors focused on maximizing returns.
Investment Strategy Recommendations
For Maximum STR Yields: Choose Kissimmee
If your goal is to generate the highest possible rental income from vacation properties, Kissimmee’s proven track record speaks for itself. The city’s 11.9% average gross yields and established tourist infrastructure create optimal conditions for STR success.
Ideal investor profile:
- Experienced STR operators
- Investors seeking high gross yields
- Those comfortable with seasonal income fluctuations
- Buyers with strong revenue management capabilities
For Balanced Growth: Select Orlando
Orlando’s diversified economy and multiple tenant pools make it perfect for investors seeking steady appreciation alongside rental income. The market’s stability and liquidity provide excellent exit strategies when portfolio adjustments become necessary.
Ideal investor profile:
- Investors prioritizing capital preservation
- Those seeking diverse tenant options (STR and LTR)
- Buyers focused on long-term wealth building
- Investors want established infrastructure and amenities
For Value-Oriented Returns: Target Davenport
Davenport offers the best entry-level opportunity for investors seeking strong yields without Orlando’s premium pricing. The market’s growth trajectory and affordable entry points create compelling risk-adjusted returns.
Ideal investor profile:
- First-time vacation rental investors
- Buyers seeking maximum cash flow
- Investors targeting emerging markets
- Those prioritizing yield over appreciation
Market Risks and Mitigation Strategies
Universal Challenges
All three markets face similar headwinds that smart investors must address:
Insurance Costs: Florida’s insurance market volatility affects all properties. Mitigate risk by:
- Shopping multiple carriers annually
- Investing in newer construction with modern roofing
- Considering higher deductibles for better premiums
- Budgeting 15-20% annual increases
Regulatory Changes: STR regulations continue evolving. Stay protected by:
- Monitoring local zoning updates
- Maintaining proper licensing and compliance
- Building relationships with local property managers
- Diversifying between STR and LTR capabilities
Interest Rate Sensitivity: Higher borrowing costs impact all leveraged investments. Optimize by:
- Securing competitive financing before purchase
- Considering adjustable-rate products for shorter holds
- Maximizing cash flow to reduce sensitivity to rate changes
Making Your Investment Decision
The “best” market depends entirely on your investment objectives, risk tolerance, and operational capabilities. Here’s a framework for making your choice:
Assess Your Investment Goals
Income-focused investors should prioritize Kissimmee’s proven STR yields, particularly in established resort communities near Disney World.
Growth-oriented investors will find Orlando’s diversified economy and appreciation potential more aligned with long-term wealth-building objectives.
Value investors can maximize returns in Davenport’s emerging market while building equity through the area’s continued development.
Evaluate Your Operational Capacity
STR success requires active management, dynamic pricing, and guest service capabilities. Investors lacking these resources should consider Orlando’s strong long-term rental market or partner with experienced STR management companies.
Consider Your Risk Profile
Conservative investors benefit from Orlando’s market stability and liquidity, while aggressive growth seekers can capitalize on Kissimmee’s high yields or Davenport’s emerging opportunities.
Your Next Steps to Investment Success
With this market analysis, your path forward is clear. Start by searching for properties in neighborhoods that match your investment strategy.
Work with local real estate professionals who know the area. A good agent can find properties that meet your yield goals while navigating local regulations and market trends.
Run detailed financial projections for any property you’re considering. Include all costs, insurance, taxes, HOA fees, management, and maintenance to ensure the investment meets your return expectations.
The Central Florida vacation rental market offers great opportunities. Whether you choose Orlando, Kissimmee, or Davenport, success comes from careful analysis, smart property selection, and solid execution of your investment plan.
