Renting the Coast
With few big hotels here, most visitors stay in privately owned houses and condos
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Unlike resort areas in other parts of the United States, there are few large hotels in Walton and Okaloosa counties. The
4.5 million visitors who travel to the Emerald Coast each year tend to stay in houses and condominiums owned by private individuals and typically managed by local firms. These vacation rentals run the gamut from being just a place to stay to providing a nearly all-inclusive resort experience.
“Our story has really resonated with consumers,” said Scott Russell, a partner in Russell Vacation Rentals, which specializes in vacation condos and homes near Destin and South Walton. “Being in a vacation rental allows you to fully immerse yourself in the destination. You can unwind, relax and explore the community. When people leave here and go back to their homes, they truly feel like they’ve been on a vacation.”
Selling the Coast
“Right now the demand is high and supply is low,” said Dana Fairchild, a Realtor with Beach Properties of Florida. “Gulf-front property is selling really fast. We’re on track to do better this year than we did in 2013 and 2014.”
Most Emerald Coast vacation-home owners buy here because they want to use the property themselves at least some of the time. Many choose to rent their property out to guests when they aren’t using it themselves to help their budgets, which is exactly what Emerald Coast vacation rental pioneer Jeanne Dailey, the founder and CEO of Miramar Beach-based Newman-Dailey Resort Properties, recommends. She’s been managing properties in the area since 1983.
“Find a location that you love and would want to stay in as a vacationing guest,” Dailey said. “People buy homes in this area because they want the American Dream, they want to own a second home. Being on a rental program gives them a way to generate the income to afford that dream.”
With 100 miles of beautiful beaches to choose from, where should someone who wants a vacation home start looking? It all depends on one’s budget and interests, Fairchild said. Prices range from about $400,000 to nearly $12 million for a Gulf-front location. But a place that isn’t on the water can be found in the $200,000 range.
Many owners have found that owning beach property here almost, if not completely, pays for itself when the owner commits to sharing his or her home with paying guests. The process is fairly simple: A prospective owner, working with a Realtor, finds a property he or she is interested in purchasing and, as often as not, the Realtor recommends a management company. The management company submits a projection of the rental income the potential owner can expect, allowing the buyer to decide if the home is affordable.
Amanda Ferguson, director of the rental management program for Sandestin Golf and Beach Resort, said her team talks at length with potential buyers to find out what they want from their property. Their goals will determine which properties they’re shown.
“If someone just wants an investment, we steer them to areas with amenities and conference potential,” Ferguson said. “Those generate more year-round business.”
Other owners, she said, might plan to spend the entire winter in their unit and then rent it out during the summer, in which case there are other properties they’re more likely to find appealing. Ferguson said that she’s able to provide owners with a detailed analysis of how much similar properties are earning.
It’s important for prospective vacation-home owners to know what they’re getting before making such a large investment, said Ashley Hamm, the CEO of 360 Blue, a management company that works primarily with properties along the Scenic Highway 30A corridor.
“A homeowner should look for a 7 to 10 percent gross rental income based on the purchase price, before commission or maintenance,” Hamm said. “Higher than 7 to 10 percent is incredible; lower than that and it should be a property that the owner plans to primarily use for themselves.”
Hamm said that 360 Blue charges owners 20 percent of the rental price as a commission. She explained that some companies might charge a bit less and some might charge more, depending on the amenities that are included. The amenities, particularly in homes along 30A, can be impressive. In some areas, guests and owners have access to golf, tennis, boating, beach clubs, child care, preferred beach parking and special discounts in stores and restaurants.
“Some places, you book a home, and a home is all you get,” said Dru Zeiset, the general manager of vacation rentals for the St. Joe Club & Resorts. “We’re trying to create more of a resort experience.”