2018 Vacation Rental Performance Report: Gulf Shores & Orange Beach

Lauren KayeLeave a Comment

With 32 miles of white-sand coastline and clear blue water, Gulf Shores and nearby Orange Beach are ideal destinations for families and fisherman alike. Once hidden gems along Alabama’s southern shore, these coastal cities have gained popularity in recent years and are now breaking tourism records left and right.

In 2016, more than 25.8 million people visited the area, marking the sixth straight year of growth. All those visitors need places to stay and vacation rentals are a top choice.

To cash in on the billions of tourism dollars being spent there every year, more owners are listing their vacation homes as short-term rentals on VRBO, Airbnb, and TripAdvisor to provide accommodations to visiting tourists.

We wanted to help existing owners and prospective buyers decide if vacation rental is the right route for them, so we analyzed thousands of vacation rental listings and compiled our Vacation Rental Performance Report for the Gulf Shores Area. The report will give you insight into the area’s average rental income, occupancy rates, booking windows, and much more.

Some of the key factors we’ve identified that are contributing to the region’s immense success are:

  • Summer high season – most places booked solid
  • Long stays (Most places have 7-day minimum nightly requirements)

Why Gulf Shores Vacation Rentals Are So Successful

Huge demand for Orange Beach and Gulf Shores accommodations is the driving force behind the area’s success with vacation rental.

It’s easy to get bookings throughout the summer season with deep sea fishing, world-class golf courses, amusement parks, beach activities, and sunny weather. In the report, we show that occupancy rates push past 60% during March, and rise above 80% during June to hit around 90% during July.

Even more promising is the fact that accommodations in Gulf Shores area have recently seen a surge of shoulder-season bookings during the fall and early winter.

The Gulf Shores area is an increasingly popular destination for snowbirds and if vacation rental owners can attract these guests, they can fill their calendars during the slower winter months and earn additional income.

Currently, top performers are seeing occupancy rates above 60% nine months out of the year, meaning they’re consistently generating rental income throughout the shoulder season as well.

How much owners can earn with Gulf Shores area Vacation rentals

Two-bedroom properties represent the majority of vacation rentals, making up 38% of the area’s inventory.How much can you make with vacation rental in Gulf Shores?

According to our report, a two-bedroom property at the median generates $25,500 in yearly revenue and $34,431 per year at the 75th percentile.

Properties at the median are dead center in terms of performance, with 50% of vacation homes performing under them and 50 percent above. We use this as a benchmark to show loosely what you can expect at the average. Vacation rentals at the 75th percentile are better performers, representing the homes in the top 25% for performance.

Three-bedroom homes are the second-most common property size in the area. Making up 32% of the inventory, three-bedroom properties bring in $39,710 at the median and $53,428 at the 75th percentile.

How to make your Gulf Shores Area Vacation Rental Even More Successful

How can you make sure your home ends up as a top performer in the 75th percentile versus lingering down in the median?

1. Update the property

You increase your chances of getting top billing on listing sites and securing bookings if your property has been renovated and outfitted with newer appliances because this is what guests want. Updated vacation rentals book faster, and often at a higher price point, than properties that look outdated.

2. Promote popular amenities

Properties with pool access, gulf views, and resort amenities tend to perform better because travelers search for accommodations with these amenities first. However, properties without
these in-demand items can level the playing field by offering lower nightly rates and flexible booking conditions (2-3 minimum nightly requirement vs. the standard 7-night minimum).

3. Location

If you’re still in the market for a vacation home to use as a short-term rental, make location a top priority. Travelers typically prefer to stay as close to the coastline as possible. Look for properties along the beach with gulf views to make yourself that much more competitive in the marketplace.

4. Costs

You can generate higher returns on your property if you can cut costs by only spending cash on the services you need. There are a lot of property managers in the Gulf Shores area that have been helping homeowners run their properties for years, but their fees range from 25% to 40% and there’s little room for negotiation about what services owners must pay for.

Using a competitive vacation rental management service like Evolve, which only charges a 10% booking fee, means you face less pressure to set high nightly rates, book a huge number of nights, or give up your coveted summer weeks and weekends to make the investment viable.

Download our full report for additional details

With consistent demand and strong returns, the Gulf Shores area is proving to be one of the top markets for vacation rental ownership.

Are you thinking about buying a vacation rental in this area? Already own a second home in the area and want to outperform the competition?

Download our free 2018 Vacation Rental Performance Report for Gulf Shores and Orange Beach to find out about:

  • Rental income potential by property size
  • Average occupancy by property size
  • Average daily rate by property size
  • Average days booked in advance
  • Average length of stay
  • Vacation rental inventory by property size
  • Occupancy rate by month

Want to earn more from your second home without all the hassle? Evolve has helped more than 7,500 owners throughout North America earn over $300 million in rental income. Click here to learn how.

Gulf Shores Area Market Performance Report

The Gulf Shores Area Report
Vacation Rental Performance Report

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