Best Gulf Beach for building a beach home rental

[Leland S.]

For some reason, I've decided I want to build a beach home along the Florida gulf coast. I want to make sure it can perform at a 10 cap or above. My understanding of Destin it's too expensive and returns aren't great. Panama City is a grungier environment but has higher returns. I was liking the Laguna Beach area, however, I saw lots in not-ideal places running for $500k. For that price, I'd have to put in a $2M total product - 4/5 bed home with pool/hot tub etc - which only grosses me 150k. Then I learned of Fort Meyers Beach where an agent told me sand is going for $300K, but a quick internet search shows sand is actually going for 1.7M. Possibly the demand is still too high for beach homes to make the numbers investor friendly, or possibly I just need to make sure I find the right spot and build the right product. 

I'm thinking of taking a week's vacation along the coast in a couple of weeks for my birthday/investment trip to do some field research. Contacts would be nice.

[John Bryant]

Hey Leland, We invest heavily here in the Panama city beach area. Everything you said is correct about PCB Laguna beach. We have multiple STRs there. However just over the past few years we have seen a massive gentrification of the area, and it only seems to be increasing. I feel like Laguna beach is not only a great 10 cap or above , but a good appreciation play.    Now just outside of Laguna beach is Riviera Beach, still considered PCB, it has a whole different vibe and more of an old beach town look. Might want to look at Sunnyside as well, but the farther west you go the higher the prices will go and the smaller the caps get IMO.    All that 30A (Graton Beach, Rosemary Beach, Seacrest, Seaside) multi million areas, which we are only 5min away from, are just gonna all slowly creep over to PCB. There's only so much water front and so much Beach like ours!