Foreclosures in Central Florida: What STR Owners Need to Know

If you’ve seen headlines about rising foreclosures, you might be wondering what this means for your investment property in Central Florida. Let’s take a closer look at what’s happening, why it’s happening, and what could come next for vacation rental (STR) owners like you.

📈 Foreclosures Are Rising, But Central Florida is More Stable

Florida ranks second highest in the nation for foreclosure activity, with about 1 in every 2,400 homes facing foreclosure. That sounds worrying, but most of the trouble spots are in South Florida and smaller inland cities like Deltona and Lakeland.

Here in Central Florida, distressed sales (foreclosures and short sales) are actually down more than 50% compared to two years ago. Equity remains strong, especially in the Orlando area.

💸 What’s Driving the Increase?

Two main factors are pushing more homeowners toward delinquency:

Rising home insurance premiums, Florida insurance rates have surged 20–50% in recent years, creating extra pressure on monthly budgets.
Higher ownership costs — When insurance costs get stacked on top of mortgage payments, some homeowners, especially those with FHA and VA loans fall behind.

These challenges are real, but the impact is felt more heavily by full-time residents than by investors with equity-rich STR properties.

🔮 The Forecast for 2026

Short-term outlook: Central Florida is holding steady for now. Tourism demand is supporting vacation rentals, and many owners are still seeing strong booking activity.
Medium to long-term: If ownership costs continue rising and more homes hit the market, some predict a gradual increase in foreclosure filings through 2026. However, strong equity positions in Central Florida will continue to provide a buffer.

🏡 What This Means for Vacation Rental Owners

Good News: Right now, STR owners in Central Florida are largely insulated. Well-managed vacation rentals are still performing, and equity positions are strong.
Risks Ahead: If rising costs persist, the pressure could build over the next few years, potentially increasing inventory as some owners decide to exit.
Opportunity: Buyers are still very active. Well-priced homes are still selling, often quickly, and STR demand remains strong in the Disney corridor.

📌 Bottom Line

Foreclosures may be rising across Florida, but Central Florida is holding its ground. For STR owners, the best strategy is to stay informed, manage your property well, and keep an eye on how rising costs might influence the market in the coming years.