Buying a Rental Property in Central Florida: An Investor’s Guide

Why Investors Look at Central Florida

The population figures are public and worth reading before any sales pitch. The University of Florida’s Bureau of Economic and Business Research, in its Florida Estimates of Population 2025, puts the Orlando-Kissimmee-Sanford metro area at 2,961,947 residents as of April 1, 2025, up 10.8 percent from the 2020 census. Within that, the bureau estimates five-year growth of 24.8 percent in Osceola County, 16.1 percent in Lake County, 7.4 percent in Orange County and 5.2 percent in Seminole County.

Job growth has been less even. The Orlando Economic Partnership reported in April 2025 that the region added 37,500 jobs in 2024, and in April 2026 it reported 8,800 jobs for 2025, well below the 44,300 and 43,900 a year it cites for 2015 to 2019 and 2022 to 2024.

None of this predicts what a particular house will rent for or be worth. It shows that demand has been real and uneven by county, which is why the numbers in this guide are run property by property.

Long-Term, Short-Term or Mid-Term Rental

The lease length you plan on decides which rules apply. A long-term lease of more than six months is the simplest case. Section 212.03 of the Florida Statutes levies a 6 percent tax on the rental of living quarters but exempts a person under a bona fide written lease for continuous residence longer than six months, and Section 125.0104 lets counties add a tourist development tax on rentals for a term of six months or less. A furnished mid-term rental to a traveling nurse or a relocating family can fall on either side of that line, so the lease term is a tax question as well as a marketing one.

Short-term rentals add licensing, local ordinances and association rules. Section 509.242 defines a vacation rental as a condo unit or a single-family to four-family house that operates as a transient public lodging establishment, and each city and county regulates them differently. Read our guide to short-term rental rules in Central Florida before you buy with that plan; the ordinance decides the strategy, and the strategy decides the property.

Property Taxes on a Rental

A rental does not get the homestead exemption. Section 196.031 reserves it for an owner who makes the property his or her permanent residence as of January 1, and the Osceola County Property Appraiser’s FAQ says rental of a homestead property is considered an abandonment of the homestead.

It does get the non-homestead cap. Under Section 193.1554, residential property with nine or fewer units and no homestead exemption is reassessed each January 1, and the increase may not exceed 10 percent of the prior year’s assessed value for levies other than school district levies. The Osceola County Property Appraiser describes it as a 10 percent limit excluding school board assessments. The cap resets to just value the January after a change of ownership, so the seller’s current bill is not your bill; a homestead is capped at 3 percent under Section 193.155.

Orange County Government’s property tax page notes that a proposed constitutional amendment on the November 2026 ballot would lower the non-homestead cap to 5 percent; it needs 60 percent of voters, so check the result.

Running the Numbers

Start with gross rent documented from comparable signed leases rather than a listing’s projection, and subtract a vacancy allowance for the weeks a unit sits empty. Then list the fixed costs: property taxes at your purchase price with no exemption, insurance, HOA dues, any CDD assessment, and any management fee. Managers generally charge a share of collected rent plus a leasing fee, so ask for a written schedule. Add a monthly reserve for the roof, the air conditioner and the water heater.

Insurance deserves its own line: Florida premiums vary widely with age, roof, construction and location, and a landlord policy is priced differently from a homeowner policy, so get a bindable quote during the inspection period. Our guide to CDD fees explains how to find the CDD and HOA figures for a specific address.

What is left is net operating income; divide it by the price and you have that property’s cap rate. We will not tell you what the cap rate for Central Florida is, because it depends on the house and the loan.

Single-Family Homes, Townhomes and Condos

Single-family homes in HOA communities carry HOA dues, sometimes a CDD assessment, and the association’s leasing rules. Townhomes look similar, but check whether a given one is platted as fee simple with an HOA or as a condominium, because the condo rules below then apply.

Condos take more work to underwrite since 2022. Section 553.899 requires a milestone inspection of condominium and cooperative buildings three stories or more by December 31 of the year the building turns 30, then every 10 years, with a local option to require it at 25 years. Section 718.112 requires a structural integrity reserve study for residential condo buildings three stories or higher at least every 10 years, covering the roof, structure, plumbing, electrical, waterproofing and windows, and says that for budgets adopted on or after December 31, 2024, an owner-controlled association may not vote to provide no reserves or less reserves for those items. On an older building, ask for the milestone report, the reserve study and the budget before you offer; a special assessment can erase years of cash flow.

HOA and Condo Rental Restrictions

Association documents can limit how you rent. Common provisions set a minimum lease term, cap leases per year, require board approval of each tenant, or limit the share of units rented. Read the declaration, bylaws and current rules yourself.

Florida law limits how new restrictions reach existing owners. For condominiums, Section 718.110(13) says an amendment that prohibits renting, alters the duration of the rental term or limits how often an owner may rent applies only to owners who consent and owners who acquire title after its effective date. For homeowners’ associations, Section 720.306(1)(h) says an amendment adopted after July 1, 2021 that prohibits or regulates rentals applies only to owners who consent or who take title after the effective date, with exceptions: an association may still restrict rentals of less than six months or more than three times in a calendar year, and associations of 15 or fewer parcels are treated differently.

You buy under the rules in force the day you close, so get the current documents and an estoppel certificate before the inspection period ends.

Financing an Investment Purchase

Lenders treat a rental as a riskier loan than a home you occupy, so expect a larger down payment and a higher rate. Pennymac’s investment property page, one lender’s public guidance, says a single-family investment property requires a 15 percent or higher down payment and that a 2-4 unit property needs at least 25 percent. Other lenders require more, and the number of financed properties you already hold changes the terms, so get the figure from your own loan officer in writing.

A DSCR loan is a different product. The lender qualifies the loan mainly on the property’s expected rent measured against its payment rather than on your personal tax returns; the rent they count usually comes from an appraiser’s rent schedule, and rates, reserves and down payments vary by lender. Cash buyers skip underwriting but should still budget as though they were paying a mortgage, because the discipline is the same.

We are not lenders. We can frame the question and introduce you to the vocabulary; a loan officer licensed in Florida gives you the numbers.

Florida Landlord-Tenant Basics

Residential tenancies run under Chapter 83 of the Florida Statutes. Section 83.49 says a security deposit must be held in a separate Florida account or covered by a surety bond, and a landlord with five or more units must tell the tenant in writing within 30 days where it is held. After move-out, the landlord has 15 days to return the deposit if making no claim, or 30 days to send notice of a claim by certified mail; miss that window and the right to deduct is lost. The tenant then has 15 days to object.

Section 83.56 sets the termination notices, including a written demand giving three days, excluding weekends and court-observed holidays, to pay rent or vacate. Section 83.57 requires at least 30 days’ notice to end a month-to-month tenancy. Section 83.59 puts possession in the county court, and Section 83.67 makes shutting off utilities, changing locks or removing doors a prohibited practice costing the landlord actual damages or three months’ rent, whichever is greater. Florida attorneys handle evictions; a management company usually has one on call.

Taxes to Ask a CPA About

These four belong with a CPA.

Depreciation: IRS Publication 527 says residential rental property is depreciated over 27.5 years under the general depreciation system, that land is not depreciable, and that mortgage interest, taxes, insurance, repairs, management fees and depreciation are deductible rental expenses.

Like-kind exchanges: the IRS says investment real property can be exchanged for other investment real property without recognizing gain under Section 1031, and its Form 8824 instructions set the deadlines: replacement property identified within 45 days of the transfer and received within 180 days or by the return’s due date, whichever is first. Property used solely as your residence does not qualify.

State income tax: Article VII, Section 5 of the Florida Constitution says no tax upon the income of natural persons who are residents or citizens of the state shall be levied; if you live elsewhere, your home state may still tax the rent.

FIRPTA: the IRS says that when a foreign person sells a U.S. real property interest, the buyer generally withholds 15 percent of the amount realized; our foreign-national guide covers it.

Buying Remotely and a Pre-Offer Checklist

Investors often buy here from another state or country, and the process is the same with a few substitutions: a recorded video walkthrough instead of a visit, a full written inspection report, a property manager interviewed before closing, and a title company that handles remote notarization and wiring. Our relocation and foreign-national guides cover the logistics.

Before you offer, confirm these in writing. First, the lease strategy, and that the city, county and association allow it. Second, comparable rents from signed leases rather than listings. Third, a tax estimate at your purchase price with no exemption, any CDD assessment, and a bindable landlord insurance quote. Fourth, the association documents, rental rules and budget, plus the milestone report and reserve study for a condo building of three or more stories. Fifth, a written management fee schedule. Sixth, an investment-property loan estimate or proof of funds. Seventh, the names of your Florida attorney and CPA.

Diana Gutiérrez is a Florida real estate licensee with LPT Realty, not an attorney, CPA or lender, and this guide is general information.