Investing in Gulf Shores Condos

Posted by Aaron Pugh on Monday, January 30th, 2017 at 9:13pm.

Growth along the Alabama & Florida Gulf CoastAs we have recently seen, Gulf Shores, Alabama is becoming a more and more popular choice for potential home buyers, vacationers, and investors. As the word gets out, there has been a gradual increase in the number of tourists, who come here for both the beautiful white-sand beaches and to stay in some of the Gulf Coast's most popular rental condos. This increase in tourism and the popularity of staying in a rental condo versus a hotel makes Gulf Shores particularly appealing to potential investors.

People flock to the Gulf Coast for spring break, summer break, or just to enjoy the sunshine after a long winter. October is typically one of the last months of the year that sees a large influx of tourists to Gulf Shores and Orange Beach. In October 2015, the occupancy rates for these area condos was just 47.5%, but that number increased to 52.1% in October 2016 (an increase of 9.8%). These extra bookings mean that, overall, there is an increase in taxable revenue from lodging rentals in the area. In September 2015, this number was $28,991,145. In September 2016, there was $30,895,632 earned in taxable revenue from renting out condos (that's a 6.6% increase in one year). The average daily rate for a rental condo during October 2015 was $122.44, which increased by 8.5% to $132.85.  (We wrote about this in our info concerning 2014 taxable revenue)

Many tourist destinations have a hard time keeping rentals occupied during the off-season (typically fall and winter, when temperatures start dropping). Condos on Alabama's Gulf Coast, however, have been increasing their occupancy rates every year.Typically this is followed by pre-construction condo development. February is one of the last months of the winter season before temperatures rise and people start making plans for spring and summer break. In February of 2015, 75% of condos in Gulf Shores and Orange Beach were occupied. In February 2016, 79.7% of condos were occupied. Taxable revenue for condo rentals in February 2015 was $9,858,794 and increased to $10,124,990 in February 2016. Average daily rates during this time experienced a small increase from $56.10 to $56.83.

Investors looking for an ideal property that can be rented out all year long can easily find the perfect solution in Gulf Shores, Alabama. Aside from the condos that are already there and have been for years, there are more condos being built and which hold a lot of potential. A thorough knowledge of how the market works, how best to advertise your property, which condos already have a good reputation, and how to make ensure your guests have the best possible experience can easily lead to a cash flow situation in which all the time and money invested in maintaining the property is paid back with interest.

Some Gulf Shores condos to pay specific attention to are the condos with indoor pools.  This feature allows for guests and owners to enjoy swimming during the short Winter.  Exercise rooms, saunas and spas, gulf-front pools, are some of the more common amenities found on the Alabama Gulf Coast while many Orange Beach condos seem to have tennis courts.  There is a handful condos with lazy rivers that guests enjoy during the hot Summers.

Leave a Comment