House vs Condo Beach Rental STR

Short-Term & Vacation Rental Discussions
6yFollow

House vs Condo Beach Rental STR

Tyler Hardy
Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes

I'm looking into into beach properties as an STR but I go back and forth on whether or not to look for a single family house or a waterfront/beachfront condo. This would be for the sole purpose of an investment but I'd like to buy in an area that I would like to stay myself once the returns justify the loss of revenue for a person night or two. I'm mainly looking in the 30A area between Panama City and Destin, FL but I'm interested in areas all the way West to Gulf Shores, AL. Basically, I'm open to the best area to attract STR tennents, as well as long term "snow birds" to maximize my annual revenue. That being said, I've never owned a condo but I have owned many homes. A condo comes out cheaper up front (generally) but how are the long term numbers compared when you factor in HOA and maintenance fees? On the other hand, a SFH is generally farther from the water (I'm trying to stay within golf cart distance to the beach), has less amenities than a condo, and higher property taxes, but seems like it would offer more appreciation than a condo. I'm also trying to factor in what clientele would be interested in each property and how that would affect damages, and length of stay. Am I over thinking this? Do any STR beach rental property owners have any insights? Has anyone owned both concepts and can compare them?

Keywords: PCB, Rosemary Beach, Fort Walton, Seaside, Watercolors, Seacrest, Miramar, Navarre, Alys Beach, Floribama

1Reply
216 views

Most Popular Reply

Candace PfabBusiness Member
Realtor · Orange Beach AL · Member since 2018 · 150 posts · 125 votes
6y

@Tyler Hardy Hi Tyler. You are asking some great questions and the best answer I know to give you is that rental income & expenses can be more predictable in a condo and attract a greater pool of guests. You will have a larger pool of folks that say, we always like to stay at Caribe or a Phoenix property, so they will be specifically searching for those types of properties. When you break down the HOA fees vs a expenses on a single family home, you typically see comparable numbers with the exception of amenities maintenance, which as you have already suggested, can drive up income & demand. While some of the condos do also see special assessments, you can also see large unexpected expenses with a single family home. Another consideration is that if we have a major storm event, it is usually much harder to get a single family home back up & running than a condo unit due to differences in construction and difficulty in getting a contractor to focus on your home vs a larger condo association who can attract contractors that regularly provide services for the association or can attract contractors due to the scope of the project. You can insure for loss of rent on your insurance policy, but there is usually a time or dollar limit on that & we have known of many instances where the work was not completed before the loss of rent coverage ran out. Hope that helps! We have owned two rental condos here & know the AL coast & W FL panhandle well. Feel free to reach out if we can help in any way!

5Reply
See this reply in the discussion

38 Replies

Jump to latestLatest
  • Justin Hutchins
    Realtor · Panama City, Fl. · Member since 2018 · 60 posts · 27 votes
    6y

    @Tyler Hardy I may have a listing coming up in Windmark beach in Port St Joe. I hidden gem on the gulf coast but heavy in STR. It's fully furnished and bike/Golf Cart distance from the beach.

    0Reply
  • Candace PfabBusiness Member
    Realtor · Orange Beach AL · Member since 2018 · 150 posts · 125 votes
    6y

    @Tyler Hardy Hi Tyler. You are asking some great questions and the best answer I know to give you is that rental income & expenses can be more predictable in a condo and attract a greater pool of guests. You will have a larger pool of folks that say, we always like to stay at Caribe or a Phoenix property, so they will be specifically searching for those types of properties. When you break down the HOA fees vs a expenses on a single family home, you typically see comparable numbers with the exception of amenities maintenance, which as you have already suggested, can drive up income & demand. While some of the condos do also see special assessments, you can also see large unexpected expenses with a single family home. Another consideration is that if we have a major storm event, it is usually much harder to get a single family home back up & running than a condo unit due to differences in construction and difficulty in getting a contractor to focus on your home vs a larger condo association who can attract contractors that regularly provide services for the association or can attract contractors due to the scope of the project. You can insure for loss of rent on your insurance policy, but there is usually a time or dollar limit on that & we have known of many instances where the work was not completed before the loss of rent coverage ran out. Hope that helps! We have owned two rental condos here & know the AL coast & W FL panhandle well. Feel free to reach out if we can help in any way!

    5Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    6y

    @Justin Hutchins I know the area there, having camped at TH Stone State Park, Cape San Blas (before it became and island). I'm not sure if the overall STR market there though. I have a friend that sold their condo in Navarre and bought on Cape San Blas recently but they have no intention of renting it out so they are not a great reference. Do you have any numbers on the property yet? Shoot me a DM please.

    0Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    6y

    @Candace Pfab thanks for the info! That's basically what I was looking for here. I'm actually taking a vacation to Phoenix X on the Floribama line in June and part of the reason for that is to check out the property/area. I try to stay (or convince my wife, if I'm honest) in a different beach town every trip to better understand where I'd like to buy. How do your properties compare in AL vs FL? Have you seen decent appreciation on them? Just curious. 

    1Reply
  • Candace PfabBusiness Member
    Realtor · Orange Beach AL · Member since 2018 · 150 posts · 125 votes
    6y

    @Tyler Hardy That's really smart to stay where you think you might like to buy. Gives you a great perspective of what might work for you or what may not. In general, AL numbers are better than FL. Much lower property taxes which also translates to lower HOA fees for Condos. We have had really good appreciation here in recent years ~ around 8.5% last year!

    0Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    6y

    @Candace Pfab That's grate! Thanks for the info. 

    0Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    6y

    SFH for me. Can check mine out in the link below

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    0Reply
  • Simon Collins
    Rental Property Investor · Saint Augustine, FL · Member since 2018 · 102 posts · 58 votes
    6y

    Being raised near Winmark in Port St Joe this has been “up and coming” since I was in high school and we are talking 18 years ago.

    I was just there visiting my parents and I do see some more houses going in there and maybe the popularity from the hurricane has brought many investors but I still know what it is like there come August-Feb (ghost town) and that is why I personally haven’t owned anything (yet) back home for short term.

    Now I could be wrong and the money is good enough to offset all the slow months.

    Just giving my perspective as I would be more inclined to buy something in Panama or Destin where there might be more foot traffic if I had to pick between them.

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    So would you rather go on vacation with the family and stay on a house close to the beach or a condo right on the beach.

    I personally would want a view of the ocean with a house or I wouldn't buy it.

    I think it comes down to preference.

    I think about what you enjoy enjoy using and run the numbers both ways to see what makes the most sense.

    What about a house on a canal close to the beach? You could jump in your boat and be in the ocean after a short ride?

    I'd just prefer to be on water or at least have a water view. I think you can rent for more money if you have this.

    2Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    6y

    @Tyler Hardy

    I have a condo in PCB and I have a large 7br sfh in the Disney/Orlando area. The condo is way easier to manage vs the sfh home. The hoa covers so much that you would typically have to worry about with a home. Plus you can’t beat the view of a condo right on the beach! Also with a beach house I think they would be harder to rent when not in the prime summer season where my condo is rented pretty much year round with smaller groups still doing weekend trips. Mortgage rates will most likely be higher on a condo vs sfh though.

    1Reply
  • Sean McDonnell
    Real Estate Agent · Surf City, NC · Member since 2017 · 648 posts · 597 votes
    6y

    I have experienced that the numbers work out more in your favor the more bedrooms the property has. What is the criteria you are looking for in terms of beds/baths?

    I also hate HOAs so I am more inclined to recommend a house vice a condo.

    0Reply
  • Glenna Wood
    So MD · Member since 2019 · 294 posts · 191 votes
    6y

    SFH for me. Condo HOAs have too much control over your property. My only exception would be a great price a in a big professionally run condo complex with a beach view in PCB. Always get as close to the beach as you can afford. What FL beach experience do you want? Mini golf, water parks, tons of shopping, lots of people or mellow family time? You can't beat the "Forgotten Coast" east from PCB to Apalachicola for mellow, uncrowded family beach. When I go to Destin for outlet shopping I feel like I've been transported to Orlando. All that traffic, stucco, and you can't even see the beach. I'm very biased to the "Old Florida" feel. Hurricane Michael wiped out many rentals in Mexico Beach and Port St Joe so the area is under redevelopment. If you have a long horizon and want the best quality beach, it's worth a look. PCB and west is a much more mature, well known market. Gulf county FL also allows dogs and bonfires on the beach and certain portions allow beach driving.

    0Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    6y

    These are all great responses with great info. That's really what I wanted to hear was a difference of opinion from a large number of people. It seams to me that it may come down to owning both and making a decision from there down the road. 

    @Account Closed That's what I'm afraid of when I'm talking about a condo association. I don't like someone having control over my property. Especially when it's an investment and not just a personal vacation home. 

    @Joey Morea Just out of curiosity, does your PCB or Disney property cashflow better? I know I will eventually be looking into Disney but I've always been curious about overall annual cashflow being that the market is based on nothing but the theme park market. 

    @Glenna Wood I am completely on your side there! When I go on "vacation" to Florida, I generally go camping. I go solo kayak camping for generally 3-4 days at a time living on what I catch. You can't really do that anywhere better than the Forgotten Coast. I am acutally headed down to a private island next weekend for a trip that is in the middle of nowhere, just how I like it. 

    But this question was posed specifically for the purpose of an investment. I'm not thinking about my opinions when it comes to choosing a beach investment, I'm thinking about the rest of the country. If it was my personally property, no one would want to rent it. I'm looking for the place that everyone wants to stay and is able to attract both summer, and winter tennents. 

    1Reply
  • Joey Morea
    Lender · Tampa, FL · Member since 2018 · 149 posts · 102 votes
    6y

    @Tyler Hardy

    Right now my PCB place is cash flowing a bit better! Without Disney Orlando is gong to be a bit a challenge but I feel like we are making some progress. My place has been booked the last 3 weeks and some of June is booked back up just not at the normal rates. The thing about the market in Orlando is how cool can you theme the house up. It’s really incredible how much home you can get for the money with a pool. My PCB condo is pretty much Booked for the summer. Orlando is just a truly year round season when things are normal so that’s great about that, and with Disney only being closed 6 days in 49 years it seemed pretty safe but things can change I guess. But if you were looking for a deal right now it might be worth looking into.

    1Reply
  • Simon Collins
    Rental Property Investor · Saint Augustine, FL · Member since 2018 · 102 posts · 58 votes
    6y

    @Tyler Hardy what private island if you don’t mind sharing ?  

    I love that stuff!

    0Reply
  • Mark H. Porter
    Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
    6y

    My single family oceanfront with a pool is booked through October.  My duplex, shared pool, on 2nd row is booked through beginning of September.  the OF one rents for double either one of the duplex units.  Go single family as close to the beach as possible.

    1Reply
  • Matt "Roar" Gardner
    Real Estate Agent · Tampa, FL · Member since 2018 · 464 posts · 452 votes
    6y

    @Tyler Hardy - I have both a SFR in Destin and a condo on Okaloosa Island. Honestly, either can work. It's all about finding the good deal and managing well afterwards. I've use a VA to help me build a database that identifies the properties that should cash flow more as well. This helps narrow down the basic search up front. Best of luck!

    3Reply
  • Frederic Babeux
    Rental Property Investor · Saint-Hubert, Québec · Member since 2017 · 70 posts · 44 votes
    6y

    I think it depends on who your target clients are. I feel older people would prefer a condo and a young family would prefer a house? Also, I think the condo might be more stable on the expense side compared to a house.

    0Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    6y

    Thanks to all of you for your input. This thread has brought in the exact type of info I was looking for from a broad range of investors, and opinions. I'll be on the hunt for a property and I'll use the info you've all shared to help me with it. 

    1Reply
  • Mike Anderson
    Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes
    6y

    This thread was really useful to me as well as we are also looking for a condo in this area as an investment. Appreciate all the advice.

    0Reply
  • Ashley Busby
    Investor · Peachtree City, GA · Member since 2018 · 1 post · 0 votes
    5y

    @Tyler Hardy - Did you move forward with anything? Curious of your decision as I’m weighing out the same thing! 

    0Reply
  • Tyler Hardy
    OP
    Rental Property Investor · Williamson, GA · Member since 2018 · 78 posts · 35 votes
    5y

    @Ashley Busby I haven't as of yet but thanks for holding my feet to there fire. I still haven't made a decision on which your of property works better for me but I will.

    0Reply
  • Mike Anderson
    Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes
    5y

    The more i run numbers on properties the more I realize the smokies are better from a cash on cash basis and I dont want to do the beach. My wife really wants a place but the numbers just dont look as good. 

    0Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Mike Anderson buy in both markets. Happy wife, happy life!

    2Reply
  • Mike Anderson
    Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes
    5y
    Originally posted by @Brian G.:

    @Mike Anderson buy in both markets. Happy wife, happy life!

    Yea going to buy down there for sure, just really on the fence condo vs a house. HOA fees are killer, but the house will rent less i'd imagine so really have to factor that in from a return standpoint. If i'm going to deploy 40 or 50k I want the best return on that possible.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free