What to Buy When You’re Buying a Short Term Rental in Gulf Shores

Avery Carl [00:00:02]:
Hey guys, welcome to our 10 episode deep dive of the Gulf Shores, Alabama market. I’m your host, Avery Carle and I wanted to let you know really quick before we get started that we do have some supplemental materials for you to go along with this podcast on our website, the shorttermshop.com. so what we have there is the current purchase prices in this market. So you can set yourself up a search, look at properties, do all that fun real estate stuff like kind of like Zillow. We’ve got it on our website and you can check out exactly how much it costs to buy a condo or single family home or townhouse in the Gulf Shores market right now. Also to go along with that, we have the Air DNA data, thanks to our friends over at airdna for this market for the past few years. So you can compare purchase prices versus the Air DNA data and kind of do some analysis there. We’ve also got a really cool calculator on the website that I built around short term rental investing to go along with all these things.

Avery Carl [00:00:53]:
Or if you know you want to buy in Gulf Shores and you’re ready to start talking to an agent, you can, you can reach out to us at agents the shorttermshop.com and we’ll get you connected with our agent in Gulf Shores. And last but not least, if you just really like us and you want to hang out with us more, we’d love to see more of you. There’s a few ways you can do that. You can join our Facebook group. It’s called Short Term Rental, Long Term wealth, same title as my book. It’s a community of over 60,000 investors sharing best practices and just kind of being friends with each other. It’s pretty cool. Or if you want to talk to us in person, you can do that every Thursday.

Avery Carl [00:01:28]:
You can sign up at stm. We have a one hour lunch hour, just office hours, where you can ask us anything you want about short term rental investing. So we appreciate you guys listening and please reach out to us with any questions. Follow us on Instagram TikTok Facebook. Join us in our community on Facebook as well and I guess we’ll get to the episode now.

Tim Grillot [00:01:48]:
Thanks guys.

Avery Carl [00:01:56]:
Hey guys. Welcome back to episode two of our limited series on how to invest in short term rentals in the Gulf Shores, Alabama area. Got the same crew as last time, Tim and Jonathan. So we won’t introduce again, but today we’re going to be talking about what to buy. So locations, types of properties, anything you want to know about what the Hell, should I buy in this market? We’re going to talk about that. So guys, anybody want to kick us off with location? Who wants to take the first location? There’s probably, I would say maybe like four to five locations we’re going to hit.

Tim Grillot [00:02:31]:
Do you want me to just kind of talk about the, the three big coastal areas or.

Avery Carl [00:02:36]:
Yeah, you can talk about that. I mean, you’re, you’re the one with the wife whose tennis team is called the Orange Beaches.

Tim Grillot [00:02:41]:
That’s true. She is.

Avery Carl [00:02:44]:
She.

Jonathan Lazzarino [00:02:44]:
I didn’t know this. That fits her well. Oh, oh, she’s gonna listen to this. Sorry.

Tim Grillot [00:02:54]:
So, yeah, so yeah, the three main areas where I mostly do business would be Orange Beach, Gulf Shores and Fort Morgan. They’re all three pretty different. So. So Gulf Shores and Orange beach both have a lot of restaurants and you know, are more a lot of high rise condos in both of those areas. Gulf Shores was developed earlier. So you’ve got the hangout, which was kind of the main hub in the 50s. And then from there you’ve got east beach right to the east, which then, you know, it’s kind of, it’s cut off by the Gulf State park, which separates Gulf Shores from Orange Beach. Now east beach is kind of walkable to and also part of West Beach.

Tim Grillot [00:03:32]:
If you go past the hangout to a lot of restaurants and bars, that’s pretty cool to that area. Then if you go down west beach even farther, then you’ve got the little lagoon to the north and the Gulf to the south. That area is pretty unique because you get some cool views from both sides. Like to the north you got the beautiful lagoon. To the south you’ve got the Gulf. So where it thins out right there, really nice properties right there that, that I really think are great. Now part something to consider with all these areas, like if you get into west beach and it looks like the, the Gulf is just right across the street. Well, it is right across the street.

Tim Grillot [00:04:09]:
But where’s the beach access? So that’s something you always have to keep in mind is that an ideal property in west beach would be either Gulf or one on the lagoon that has deeded beach access right across the street. Because then you could be on the lagoon and just go straight to the beach. Whereas if you’re on the lagoon and you’re in between two public access points and you don’t have deeded beach access, you may be walking, you know, 10, 15 minutes to the beach. So that does make a difference. Kind of got sidetracked there. But but anyway, if you go back to the east, then you go into Orange beach, which is, you know, newer. You’ve got a lot of shopping there, a lot of cool restaurants and marinas and all this cool stuff. The pH is a bunch of big, the coastal, a new restaurant that’s open up over there.

Tim Grillot [00:04:52]:
But anyway, it’s a really nice area. Then if you go to the west, the far west, you’ve got to go back north a little bit anyway. And then you go on the north side of the lagoon all the way west into Fort Morgan. That place is way different than the other two because for one it’s not as developed, it never will be. They’ll never be as many high rise condos because there’s height restrictions on what can be built there now. But it’s a pet friendly beach, so you can walk your dogs on the beach and that’s a huge part of the attraction there. So a lot of my clients that have pet friendly houses are doing very well. Now.

Tim Grillot [00:05:29]:
Condos are not typically pet friendly in Fort Morgan, so that’s something to consider is that the guests cannot normally bring pets to condos. So that can affect rental numbers for condos. And in Fort Morgan then there’s one more area, Dauphin island, which I don’t talk about too much unless people ask. And the reason is, is that it is a barrier island. So just in its nature, it’s a barrier island, meaning it protects Mobile from, from hurricanes. And that’s the island that’s doing the protecting. So, so if, if storms come in, it does take quite, it usually gets the brunt of the damage. Even storms that seem pretty minor to Fort Morgan, which is just a little bit to the east, it can do more damage to Dauphin Island.

Tim Grillot [00:06:14]:
There’s a lot of erosion there. That being said, I love Dauphin Island. I’m not saying anything negative about the experience there. It’s just if you’re investing there, to me you just have to be aware that there’s a lot of erosion and, and on top of that, there has been discussions with restrictions there changing and things. So it is a, that would be more of a riskier investment. But the price points are much lower as well.

Jonathan Lazzarino [00:06:38]:
I’d say, I’d say if you’re gonna go to Dolphin, go there once and check it out yourself. You know, I, I fell into, I don’t want to call it a trap. I don’t want to, I don’t want to downplay it, but you know, I had stuff in Gulf Shores already and I’m like looking at Zillow and Zoom. And I found these places on Dolphin Island. I got all excited. I found this duplex out there that was like two side by side, three bedroom, two baths. And the numbers were fantastic on it. And I got all excited and called Jonathan and he’s like, well, one.

Jonathan Lazzarino [00:07:04]:
Have you gone out there? Because you got to ride a ferry to get there, you know, so it’s not like you can even just like, drive unless you go. You can drive there from Mobile, but it’s kind of weird to get to. But then, like, he asked which property it was, and I sent it to him, and he’s like, do you see those? How the water is, like, lapping up underneath the house, Tim? I said, oh, yeah. And he’s like, yeah, you don’t want that. So like you said, it’s a. That place is going to be gone, you know, someday. So you just got to watch what you’re getting into and know what you’re getting into. I mean, if you’re fine with that, go for it, but you got to know what you’re getting into there.

Jonathan Lazzarino [00:07:34]:
So.

Avery Carl [00:07:35]:
Yeah. Yeah. And that is something to really look out for, because some people, I. I saw an episode of Beachfront Bargain Hunt. I can’t remember what channel that’s on, but it’s exactly what it sounds like. It’s like House Hunters, where they’re showing people beach houses, and people were looking in Gulf Shores and Dolphin island, and they went and looked at this house that was in the water.

Jonathan Lazzarino [00:07:55]:
That’s the way this one was. It was legit. Like, you could. They advertised as, you can fish off the deck and you could. It was like, literally the. The waves came up under the house. It was up on stilts and everything.

Avery Carl [00:08:04]:
You know, but, yeah, and that’s something you have to really be careful of because on that show they were saying, man, this is so cool. You’re, like, in the water. What a great retreat. You’re in the ocean and it’s not cool, especially as an investor, because I’m sure a few years ago, everybody saw that video that went viral of the house in the Outer Banks that just floated off into the ocean. That’s eventually what’s going to happen to.

Jonathan Lazzarino [00:08:26]:
One of those someday.

Avery Carl [00:08:28]:
Yeah, yeah. And aside from that, even if it weren’t, the potential is there and you will not be able to get insurance. I saw somebody posting one of those on one of the Airbnb for sale groups trying to sell something in the ocean, and she was arguing with everyone about, well, we got insurance just fine on this. And I’m like, y’ all, I don’t think that’s a good idea. So it can look really cool. I mean, who doesn’t? It’s like an overwater bungalow kind of, but probably not something that we would recommend buying. So don’t get sucked into that Dauphin Island. There can be some great numbers because it is cheaper if you’re a little further back.

Jonathan Lazzarino [00:09:03]:
Back.

Avery Carl [00:09:03]:
But you have to keep in mind what Jonathan was saying, and definitely, please, please, please don’t buy something that’s already in the water.

Tim Grillot [00:09:10]:
And one little note on that is, even if you can get insurance, and it looks like the numbers are great. I have one under contract there. And we found out that the road kept getting shut down due to sand, and it was restricting potential guests from even coming, so they had to shut it down. So even though it looked that one was insurable, the road, the access to it was hampered throughout the year. So there’s little things like that that are very big things actually. And you know, it’s just, you just got to do your research. And I say not to invest there, but be very.

Jonathan Lazzarino [00:09:40]:
Make sure you have a dune buggy. I don’t know as far as what to buy in Gulf Shores. I’m a Gulf shore. You know, I know Gulf Shores more than the other areas. That’s where we are. But, you know, there’s a good mixture for me, I’ve seen of condos and, and. And single family homes. And my biggest thing is you looks like a beach house.

Jonathan Lazzarino [00:10:02]:
Whether it’s a condo or single family home. You know, you don’t, you don’t want to buy a house that looks just like what your client or your guests live in. You know, you don’t want to look like a. Just a normal house. So I mean, to me, just, just buying something that looks like a beach house. And I’m sure you see this, Jonathan. We see it here in Tennessee. But like, sometimes people will come with these houses that are really cheap, and there’s a reason for that.

Jonathan Lazzarino [00:10:22]:
You know, it’s usually because it’s not something that’s going to rent well, so.

Tim Grillot [00:10:25]:
Exactly. I mean, the things that rent well are beaches. I mean, you know, some people get a little creative with it, but it’s usually br. Beachy beach house. You know, those are the ones that do, do tend to do the best from an aesthetic perspective.

Avery Carl [00:10:40]:
Yeah. So before we go into the different areas a little bit further, I think we can pretty much agree what does not work across the board is the stuff that Looks very residential, like 90s ranch homes or like even like 50s ranch homes. It needs to be have that beachy aesthetic like we talked about. So you want to make sure no matter where you’re investing, that you’re investing and buying a property based on what your guest avatar wants, typically wants to rent. So don’t buy something weird because it’s super cheap and say, oh, it’ll get rid of. No, people don’t come to the beach to stay in a house that looks like exactly like the house that they live in. They come to have a vacation experience and stay in a beach house and you know that fully immersive beach feel. So make sure wherever you’re investing, you’re buying based on what the tourists come to stay in.

Avery Carl [00:11:28]:
Well, let’s talk a little bit about are the regulations any different between any of these areas? Are they pretty similar across the board? We touched on it in episode, episode one, but let’s talk about it a little more in depth here.

Tim Grillot [00:11:38]:
They are very different. So if we start out in, in Orange beach and work our way west in Orange Beach. Orange beach is pretty restrictive. So the Whole City has 180A six month minimum except for PUDs planning and developments. There’s several of those that allow for short term rentals and those will not be affected by the. Those are, they can set their own limits. Then south of Perdido Boulevard, so anything that’s directly Gulf Front is all, all those are rentable there and zone for short term rentals. Then if you work your way west into Gulf Shore, Second Avenue and south is where you want to be except for a few exceptions that may be grandfathered in and you can transfer the licenses in those few instances.

Tim Grillot [00:12:19]:
Then in Fort Morgan it’s pretty much unrestricted besides a couple of HOAs, you know. And on the north side of Lagoon there’s a few HOAs that are restricted. And on the north side of Fort Morgan Road there’s Bay Gardens. But other than that, you can rent.

Jonathan Lazzarino [00:12:37]:
Anything over there, which I think is pretty safe to say that’s where people want to be in all those areas. I mean that’s where, you know, tourists, they, they don’t want to be up, you know, further north where it’s, you know, they don’t want to take 25 minutes every morning to get to the beach, you know, so I think the areas that are open are the areas where people want to be anyway.

Tim Grillot [00:12:53]:
Exactly right. And you know, there’s only a finite amount of development that you can do in this area. This Zone for short term rental, which I like as well. It keeps it kind of scarce. I like also.

Avery Carl [00:13:04]:
Yeah, I like that too.

Jonathan Lazzarino [00:13:05]:
That’s actually a fantastic point, you know, I mean, because as far as like building new. They are building new stuff all the time, you know, but it’s a lot of, it’s like kind of rebuilding, you know, honestly. But it’s, it’s there like Jonathan said, there’s only so much they can put in there. So there’s only so much beach and that’s what people are coming for.

Avery Carl [00:13:21]:
Yep, totally agree with that. And so is the tourism any different? Different demographics in different areas. So I would imagine that there is the people who might want to party might want to be closer to the hangout and the people who might want to not be bothered might want to be in Fort Morgan. But correct me if I’m wrong about that.

Tim Grillot [00:13:42]:
No, you’re absolutely right. I mean it is a pretty family friendly place all. I mean they try to make it as family friendly as possible. They even implemented alcohol restrictions during spring break, which a lot of people are like, oh, what’s this about? But it’s because they want more family friendly crowds coming here. And Fort Morgan I would say would be, I mean, of course you can get partiers anywhere. I’m not saying that you can’t. But Fort Morgan would be probably the most family friendly because it’s a little bit away from the main bar scene and, and you have more pets because of the pet friendly beach. You got people who like to bring their pets and big families and stay over there.

Tim Grillot [00:14:16]:
You do have. I forgot to even mention this place in the what to. What to do here. But Flor, Bama and the Hangout are both huge bars and restaurants. So if you’re by the floor, Bama, which is right on the Florida Alabama line, they have events there all the time too. And that’s a very, you know, a lot of people come there to party. I mean if you have one of the Phoenix 10 or the Phoenix 9, which are right by there, you’re. You’re going to make good money because you’re.

Tim Grillot [00:14:38]:
It’s a very high demand. But people are going to be partying for sure.

Avery Carl [00:14:42]:
Yeah, yeah. And let’s talk about the Phoenixes really quick because you see a lot of tourists say I want to be in Phoenix X, Y or Z. What’s a Phoenix? Why do people want to be there? Let’s talk about that.

Tim Grillot [00:14:54]:
So Brett Robinson is a company that developed all the Phoenixes and they’re, I think the world of them because they’ve done a lot for this community and they, so they, the Phoenix, I think there’s 20 of them or so and they, there’s more that are being built now and they’re just, they’re known for their great amenities. So they have, which is an important thing for condos to have is they don’t not only have awesome gulf front pools, they have indoor heated pools. So you have off season amenities. They, every one of them pretty much has all these similar amenities. Tennis courts, squash, little game rooms for kids, everything like that. So they’re, they’re known. So if somebody says, oh, I want to go stay to Phoenix, they may be staying at the Phoenix 3, which is an older one, or they may be staying at a Phoenix 11 and some of them are nicer than others, but they’re all going to have those really great amenities and they’re kind of well known for, for that. And they have really good, you know, branding and name recognition here because of that.

Avery Carl [00:15:52]:
All right, I wanted to hear about that really quick because somebody new coming into investing here will be like, why is everybody talking about this Phoenix? So there’s a lot of them in different places.

Tim Grillot [00:16:01]:
Yes.

Avery Carl [00:16:02]:
And typically I would think that the demographic going to visit Fort Morgan, aside from people who might want to be a little bit further away from the action, are going to be people who are traveling with pets, probably a lot of them.

Tim Grillot [00:16:14]:
I mean our, our houses are all pet friendly and we do get a lot of people with pet stays. You know, I do, I have some clients who’ve tried to go on the non pet friendly route with houses and I, you know, I will say I would recommend to go pet friendly with any house in Fort Morgan, but just because of the pet friendly beaches, it is an attraction.

Avery Carl [00:16:33]:
And I’ll add to that if you’re gonna go pet friendly, like you kind of have to go all the way. So I just came off of a road trip where we were staying in Airbnb with our little Chihuahua and there were places that were pet friendly and they would, you know, they gave them dog treats and stuff. But the actual way that it was set up was not pet friendly. Like the, the way our unit was, it was in a, like a, it was technically a boutique hotel, but it used to be like an old, old apartment building, like probably 100 years old. And the way it was set up was all of the, all the units are like right. Kind of situated around the front door and the walls are really, really thin. So anytime somebody was walking into the property. It sounded like they were coming into your unit and our dog would get all freaked out.

Avery Carl [00:17:20]:
I spent all night trying to keep her quiet. So it really did not lend itself. I didn’t really have anywhere for the pets to go potty, anything like that. So if you’re going to do pet friendly, you need to make sure that it actually is a friendly place for pets and your people are going to be able to actually vac. I did not have a good time at that place because I just had to be worried about, oh, is she gonna hear that over there and, and freak out and you know, maybe, maybe my dog’s bad, I don’t know. But I just, it just wasn’t fun. Like I wish it, they, it would have just not been pet friendly. So I wouldn’t have booked it because it would have been easier to just not deal with it and find somewhere else a little further away from stuff.

Avery Carl [00:17:56]:
So if you’re gonna do pet friendly, you, I, in my opinion, you really need to go the extra mile. Like go all the way, give them dog treats, give them, you know, leave, leave pet stuff, leave pet bags, most importantly, because I forgot them a lot of times, left them in the van, the van’s parked somewhere else and I’m like, crap, she’s here. She is going to potty and bag on me. Yeah. So you need. Supply the potty bags.

Tim Grillot [00:18:20]:
And that’s why, speaking of pet friendly, I think Tim has a story because they Fort Morgan’s a pet friendly beach, but I can’t remember. Tim is Gulf Shores.

Jonathan Lazzarino [00:18:29]:
Yeah, don’t, don’t take your dog to Gulf Shores. And if you do, you can take it there. You just can’t go on the beach. And I found that out. Well, I kind of knew, but I wanted to test it, which is probably not a smart thing to do. We’re like, well, you know, they say it’s not dog friendly, but you know, let’s see what happens. It’s early in the morning, let’s go for a walk. So I took my dog for a walk out on the beach at like, I don’t know, six or seven in the morning.

Jonathan Lazzarino [00:18:50]:
And I was walking along the beach and here come this SUV with the cherries on, chasing me down the beach with my little six pound dog. And I’m like, you have got to be kidding me. I’m going to jail. And he pulled us over and he’s like, you know, he was nice. And they, they didn’t give me a ticket or anything, but they did give me a relatively stern warning and told me that it’s not allowed and asked me to remove my dog and which we did. And so don’t, don’t take your dog on the beach and go offshores. It’s not cool. It’s not allowed.

Jonathan Lazzarino [00:19:16]:
And I shouldn’t have done that.

Avery Carl [00:19:21]:
Okay, well let’s, let’s move on to something else. So let’s talk about. There’s a lot of condos in this area and a lot of new investors automatically say I don’t want a condo. And that can be true in places or they don’t want a condo because they’re worried that the HOA is going to change the rules on them and make it to where they can’t short term rent, which happens in areas where a lot of people live in. Where in a condo building where a lot of people are actually living there. But the condos in this area were all built specifically to be short term rentals. So let’s talk about that really quick. Why are condos actually can be a really good investment and not something that you necessarily want to shy away from in this market.

Jonathan Lazzarino [00:20:02]:
Yeah, I’ll start with that if you don’t mind. I mean I’ve got, we’ve got two of them there and we, we, I’m going to start off, we have two condos and we love them there. To what Avery said, a condo is not a condo is not a condo. You know, you need to look into it and have an agent that knows the area, which Jonathan knows really well. But when you get into a condo building in a true vacation market and you know, something was built to do this, I think they’re fantastic. And that’s my personal opinion. You know, people get freaked out about HOA fees and stuff and they’re, they’re real. But one of the big things you really got to look at when you’re looking at, when you’re doing your research over condom, it’s a little bit more research than a house because you need to find out, you know, how’s the HOA ran, what’s it look like and what are their goals and objectives? You know, their goals are to make it a tourist friendly place.

Jonathan Lazzarino [00:20:43]:
It’s awesome. And, and, and what exactly do they include in your HOA fee? So like our HOA fees I think are pretty reasonable. Some people in the building think they’re like crazy high and I don’t know, they’re like 400amonth or something. But, and I know this is, we’re, it’s 2023 July. So whatever, you know, whatever, whenever we listen to this 30 years from now. But anyway, our HOA though, it includes like a lot includes our, it comes with the Internet, it comes with the water, it comes with the sewer, it comes with, basically everything is covered except for our insurance for the cube. And you know, when I say the cube, that means our inside of the condo. You know, the outside of the building is covered by the HOA and all the grounds and everything and our electricity, everything else is covered by the hoa.

Jonathan Lazzarino [00:21:26]:
So you know, it, it, it’s not that big of a deal. And then the other scary, one of the other scary things is assessments. And assessments absolutely happen. But to me, all that stuff, again, if you’re, if your HOA is conscious of what these buildings are for and they’re for short term rentals, it can be a great thing because they plan together and work with you. It’s no different than house and having to plan out your capital improvements down the road, you know, so like a lot of times your big assessments are, you know, fixing up the building and making it nicer. You know, I’ve been through some big, some big assessments, but all of ours, knock on wood, that we’ve had, they’ve made the building better, which have increased the value of it. You know, and it’s made a better experience for our guests. You know, we, you know, you put a new roof on a house, it’s going to cost you money.

Jonathan Lazzarino [00:22:09]:
You put new air conditioner and it’s going to cost you money. A lot of this stuff is what these assessments are for. You know, the other thing, insurance assessments happen and you know, when, you know, anywhere, anywhere on the Gulf or anywhere on the, on an ocean, you know, when big, or any really anywhere, when big disasters happen, insurance tends to go up. And when insurance goes up again, if you have a single family home, you’re absorbing that all by yourself. When you’re in a condo, you’re, it’s getting split between all the owners and they can handle it two different ways. Some, some HOAs will just put like an insurance assessment where they kind of recapture it in an assessment. And some will just increase the dues and to me, I actually kind of prefer they just increase the dues. And that’s what ours has tended like.

Jonathan Lazzarino [00:22:48]:
They’ll do assessment, assessment and they don’t like having a ton of assessments. So when they start feeling like we’re stacked up on assessments though, we’ll have a meeting and we’ll like vote to like, let’s just Raise the dues to this and it covers it. We’re good, you know, so you just got to research it. But as far as the pros of it, I mean, again, a lot of stuff is taken care of and there’s a lot of infrastructure in place for taking care of the building, taking care of the amenities. You have amenities that like you have a pool, you have a lot of them, have a gym. You know, there’s just a lot of things that come with it and a lot of them are in a fantastic location. You know, ours happened to be beachfront and have beach access right to the beach. So, you know, it’s a good way to get into a property that’s relatively inexpensive compared to buying a beachfront house and have beachfront access.

Jonathan Lazzarino [00:23:30]:
And it’s all right there. You know, you can sit, you can sit in my living room and watch dolphins jumping around. I mean, it doesn’t get a whole lot better than that, so.

Tim Grillot [00:23:38]:
Absolutely. And Tim covered. I mean, he hit everything there. And it’s, it’s really, when you’re buying a condo, here they are, they can be great. It’s just you do, you do have to, like Tim was saying, you have to be more diligent, you have to do more due diligence than you do with the house. It’s just, frankly, that’s just what you have to do. Because with the, with a condo you have that extra layer of the HOA or the condo association that you are dependent on them running it well. And if they’re not running it well, it can bring your value down.

Tim Grillot [00:24:04]:
If they’re running it well, over time it will appreciate and be a great asset for you. And as far as assessments are concerned, sometimes if you know the assessment’s coming, like, like Tim was saying also because you can find, try to find this out during due diligence the best you can. If they’re putting a new elevator in and this, that’s been one of the biggest complaints of the complex. And it’s $15,000 per condo. Over the long run, that could be a good improvement. Or new sliders with better views for the condo or whatever it might be. This could improve the value of the condo, make it a better, more rentable condo. So those aren’t necessarily a bad thing.

Tim Grillot [00:24:38]:
But then if you have a mismanaged condo, like there’s one right now that there’s, you’re going to see a ton of these hit the market for low prices because there’s $140,000 assessment coming along. And I’ve always been wary of this complex because of the deferred maintenance and it was just mismanaged. That’s just what happened. So these people are in a bind but the vast majority are not run poorly. But you do have to be very, very diligent and you can get a really good.

Jonathan Lazzarino [00:25:04]:
And you, you do want to be in a building that is managed correctly and from a maintenance standpoint and everything, I mean our big one, when they did our big one it we did the entire exterior, you know, basically ripped off the entire exterior. All new windows, new roof, new handrails and every unit new really nice sliding doors, hurricane proof doors. All the things, you know, that which actually helped our insurance, you know. So it’s like a double edged sword. They like did we put in a bunch of money up front but it lowered our insurance because we put in all this. Jonathan probably knows a better term. I’m say hurricane proof stuff, you know. So you know again it’s just you gotta, you gotta manage it.

Avery Carl [00:25:40]:
Yeah, you absolutely have to manage it. And I think you did a really good job of talking about all the, all the pros of condos. I am not, I am very pro condo in a lot of the beach markets. So I think that was really helpful to kind of explain to people that it’s not really anything to necessarily be scared of. Just takes a little more due diligence.

Jonathan Lazzarino [00:25:59]:
Another thing I’m just going to hammer real quick is it is a market that specific thing, you know, market to market. Like I’m anti condo in other markets, you know. But yeah, there, you know, so it just depends where you’re at.

Avery Carl [00:26:10]:
Absolutely. All right, let’s talk about proximity to the Gulf versus proximity to the lagoon versus the bay and where Jonathan touched on it on the last episode a little bit. But where do you really want to be? What are differences in prices in the areas and things like that?

Tim Grillot [00:26:27]:
So, so in my opinion an ideal property is walkable to the beach. But that being said, I’ve closed many that are not walkable to the beach. Mine are not walkable to the beach. You can, you can still hit some, some good numbers but you just have to be aware of the fact that you’re not likely to hit the same numbers as if you were walkable to the beach. So you got to price that in to your purchase. So that being said, there’s a ton of properties like in Fort Morgan if you’re south of Fort Morgan Road, there’s so many properties that are within a five minute walk to the beach that are great. You can take your dog, just go from the house and walk straight to the beach. As far as if you’re on the north side of Fort Morgan Road.

Tim Grillot [00:27:05]:
No, you really aren’t walkable in my opinion because it’s set for very few areas because it’s. People fly down that road and it’s just a little dangerous to cross. Then if you. So if you have bayfront, you do have ways you can market that. But there are things to consider. Like my properties are bayfront, but economies of scale. We got five on the same pier in an RV park. So if we’re doing something to the pier, have any expenses related to the pier, it spreads across all the properties we own.

Tim Grillot [00:27:31]:
If you have one house on the bay or on the lagoon for that matter, and you have a pier or boathouse, well, you have to consider the expense to maintain that pier and boathouse and how that’s going to factor into your numbers. So those are directly going to affect your bottom line. But, but that being said, you can get some great properties. One of my favorites is if you’re on the south side of the Blue Lagoon and you have deeded beach access, you can get, you can get a very deeded beach access, meaning it’s deeded right across the street and you can just walk across. Then you don’t have to pay Gulf front prices because you can get, you know, significant decrease by being on the lagoon side versus the Gulf side and still have easy beach access and hit some, some nice numbers in my opinion for doing it that way. But if you’re in Orange beach, it’s way different. So Gulf Shores, East Beach, West Beach, a lot of those are easy walks across the, the crosswalks depending on where you’re located. If you’re in Orange beach in one of those pods like Somersault or some of these that are across Perdido Boulevard, it’s not as easy to cross the road.

Tim Grillot [00:28:35]:
So you may have to drive to beach access there and that will affect how you market your, your property.

Avery Carl [00:28:41]:
What is public beach parking look like over there? Is it impossible to do? Are people having to drive around for three hours because it’s so crowded? What’s that look like?

Tim Grillot [00:28:49]:
Well, that’s why I definitely prefer to be walkable because during the peak of the summer, yes, it is crowded. I mean, it is, you’re gonna, you have to leave early. There’s a good chance you won’t be able to park. I mean it’ that it gets packed. This place is very desirable. So if you’re walkable. You don’t have to worry about any of those things, but you’re gonna have to fight for a public parking spot because of the demand.

Jonathan Lazzarino [00:29:09]:
You touched on something on the. On the lagoon. Lagoon side, the piers and boathouses and all that. I’ve seen that when I’ve been down there in a lot of houses. Is that something that guests like that? Like, do a lot of people bring their own boats there? Or how’s that work? Is that. Is that an attraction for people to have a boat slip, if you will?

Tim Grillot [00:29:26]:
It definitely is, a hundred percent. I get asked that all the time. We don’t have boat slips on our place, but we’re going to probably put some. But they. Yes, people do love to bring their boats. You just have to weigh the. The benefit, the pros and cons, because it is. It’s hard to insure those.

Tim Grillot [00:29:41]:
In fact, you probably can have trouble getting insurance on the pier and boat dock. So if something. If they get damaged, you have to cover that out of pocket. They’re expensive. So, you know, I’m not saying not to do it, but it’s just an expense. You have to calculate if it’s worth. Worth doing it. But there is a demand for it, for sure.

Avery Carl [00:29:58]:
Awesome. All right, next question that I had. Are there certain areas that have higher concentration. Concentration, excuse me, of either condos or single families? So if people prefer to stick with a condo or prefer to stick to a single family, are there certain areas that they should be looking at more than others?

Tim Grillot [00:30:16]:
Well, there’s a lot of single family in Fort Morgan. I mean, just because there aren’t as many condos, it’s a pretty big. It’s deceptively big area because if you go, you see a lot of trees and you have to drive a little bit, and you may pull into a little area and then realize it’s a big community. But there’s a lot of houses in Fort Morgan in. In Gulf Shores, too. You know, everything Second Avenue and South and down on west beach is a good concentration of houses, but a lot of condos there, too. Fewer condos in Port Morgan than anywhere. There’s only like, you know, maybe seven or eight complexes.

Tim Grillot [00:30:48]:
Orange beach, ton of condos, mostly condos there, besides a few houses. And the houses are pretty pricey there, too, because there’s so few and far between, at least on the Gulf side. But yeah, you’re most likely to find a house in Port Morgan or Gulf Shores. Not as likely in Orange beach, but there are some there, too.

Avery Carl [00:31:06]:
Awesome. And last but this is going to be kind of a long topic, I think. Let’s talk about what we’re buying in terms of amenities and views. And we don’t have to get too far in the weeds on income here because we have John Bianchi coming on the next episode to get in the weeds on that. But what are we looking for in terms of what we’re providing for amenities or, you know, things we can offer the guests maybe that come in a condo building or do we need view properties? Do we do not view properties perform just as well if they’re walkable? What are we looking at there?

Tim Grillot [00:31:36]:
Well, in my opinion. So when it comes to condos specifically, if you’re talking. Because it’s different with condos and houses. With condos, you’re competing against a lot of other condos that have a minimum amenities, which is different from houses. Most houses here don’t have private pools or even community pools for the most part. So houses without any access to pools can still do pretty well from what I’ve seen. For a lot of them that I’ve closed have not had pools. But if you do have a private pool or community pool, you do see a boost.

Tim Grillot [00:32:06]:
I mean, absolutely. You do with a condo, if you don’t have a pool. My opinion, take it or leave it. I would not touch it. I would not touch a condo here if it doesn’t have a pool.

Jonathan Lazzarino [00:32:16]:
Because there’s one step further heated pool. It’s like that. That blew my mind, like, honestly, like when we bought there. I’m not from the south, but I’m like, why do you need a heated pool at the beach? You know, but man, people ask about that all the time. And they. And if the heater, if the pool heater goes down, we hear about it, like, instantly. That’s like, number one thing. It’s crazy.

Jonathan Lazzarino [00:32:38]:
So. But I agree with Jonathan that 100. You got to have a pool in.

Tim Grillot [00:32:41]:
A condo and that opens it up for the. The slow. For the, you know, for the snowbird season, too. So I agree with that. 100. Any kind of. If the condo has a complex, has heated pools, hot tubs, things for the off season, even where the pool is located and how big the pool is, all this stuff does factor into condos. So you do have to pay it.

Tim Grillot [00:33:00]:
You are competing against other people with other great amenities. So.

Jonathan Lazzarino [00:33:03]:
And what he just said on where it’s located, basically, if it’s on the. The front side facing the ocean is a lot more desirable than a pool on the backside. That’s like in the parking lot or the street side. So when you’re looking at buildings that, that can make a shocking amount of difference. So you want, you want your pool on the beach side and a lot of times those like, like the pool area has a gate that goes right out to the beach. And then honestly in my opinion on condos, again, your, your beach access, pay attention to that. Some of them are literally a path through the dune and the sand and some of them are really nice wooden, you know, walkway and then there’s kind of everything in between. So you don’t have to have the really nice wooden walkway, but it’s just, it’s curb appeal.

Jonathan Lazzarino [00:33:46]:
You know, when you, when you have your photos and everything and it’s got a nice path going out to the beach and stuff, I think that stuff all, all makes a difference for sure. So. And it kind of speaks to a little bit of the management of the building. You know, if, if they have nothing down like no path and it’s just like beat through the, the, you know, they’re, they’re not, to me, they’re not paying attention as much as is the ones that really, you know, they have a really nice wash off station, they have a nice pool area. I mean when everything looks really nice, that’s kind of what you want.

Avery Carl [00:34:11]:
So my opinion, yeah, I totally agree with that.

Tim Grillot [00:34:14]:
Absolutely. And on the views, I know I don’t know if we’ve talked about that, but that is huge. You’ll, you’ll see it priced in though. So everything, even though certain things are more desirable than others, everything has a price on it. So you may see a condo in the building that’s facing the parking lot. Well, you know, it’s definitely not going to rent anywhere close to the same condo. If you just moved it to facing the Gulf, it just will not. I mean you’re going to have to, you can market the views.

Tim Grillot [00:34:41]:
It’s just so much more desirable. Many people come to the beach to be on that front patio just drinking a cup of coffee or a cold drink and looking at the, the beach. I mean that’s a big part of why people come. So you, you just have to think about that when you purchase it. If you’re buying one at a bargain deal, it could be a bargain deal for a reason. And you need to factor that in your numbers. You’re not going to automatically say I’m going to do as well as this one facing the Gulf, because you’re probably not. I mean, unless they’re just really Mismanaged on the one facing the go.

Jonathan Lazzarino [00:35:09]:
I think too that the view changes your seasonality a little bit too. You know, in that same token, you know, you’ll get a lot longer of a season with a view than you will without a view.

Avery Carl [00:35:20]:
Yeah, I totally agree with that. And are we what is standard or. Actually I’m gonna back up. Hot tubs. Is that really a thing here? Do we need to have hot tubs? Pool? Yes. It’s hot outside, people want to get in the pool. But hot tubs, it’s kind of weird markets. Like yeah, you do want a hot tub even though it’s hot outside.

Avery Carl [00:35:37]:
I don’t know why you want to get in a hot hot tub when it’s hot outside. It’s not about me though. So what is it here?

Tim Grillot [00:35:42]:
Well, in my opinion, I keep, I keep jumping in before 10. But the.

Jonathan Lazzarino [00:35:47]:
So you live there?

Tim Grillot [00:35:49]:
Well, yeah, but you, you know, you have a couple here. So the. But the hot tubs are great during. I still like hot tubs because during the off season you want something to attract snowbirds. Now you’re not going to make a ton of money, but if it does offer a hot tub, it is a bonus. It’s a plus. But is it a but must have like the smokies. Absolutely not.

Tim Grillot [00:36:08]:
A pool is the big amenity here. A hot tub is a bonus for sure, but it’s not a must have in my opinion.

Jonathan Lazzarino [00:36:14]:
I’m pretty close to agree. And I want your opinion on this. What about a hot tub at a house? Because like snowbirds generally aren’t going to rent a four bedroom house, you know, and I don’t think a hot tub is going to make them do that, I don’t think. But you know, generally what I see the snowbirds renting is you know, a smaller gulf facing property, you know, a one or two bedroom, something like that. And then there I agree. You know, if you’re in a condo building in the, in the pool area, they have a built in hot tub. I think that’s fantastic for that. But outside of that, I don’t know.

Jonathan Lazzarino [00:36:43]:
Do you really, do you really see the need for them at a house?

Tim Grillot [00:36:46]:
No, no, really, A condo is what I was referring to. But a house, you know, I’ve had a client, I need to follow up with him to see if it increased his numbers. He was going to try it out to see how it worked with a hot tub. But you know, to be honest, there’s not a whole lot of houses with hot tub which you know, that Kind of could be an opportunity to. For some people, but I, I haven’t seen enough data to see if it’s. I wouldn’t think in the summer it would help too much. I mean, it’s. It is too hot to get in the hot tub, I would think for most people during the summer, but during the winter, I mean, I don’t know.

Tim Grillot [00:37:16]:
That’s a good question. I don’t know if it’d be worth the headache of maintaining it.

Jonathan Lazzarino [00:37:21]:
Another thing I like to see, and this is actually it can work on both, but it leans a little bit more on like the, the. I’ll say the baller single family homes. But if you have a, if you have a pool shade, you know, having a cool outside space and having, you know, whether it’s like a cabana type thing or something, you know, those. I don’t know what they’re called. They’re like triangle. I think you might call them sun kites or something. I don’t know. It’s like canvas they put up.

Avery Carl [00:37:44]:
Yeah, I know what you’re talking about.

Jonathan Lazzarino [00:37:46]:
Stuff like that goes a long way, I think. You know, and again, one, it photos well, but two, like when families are there, the kids all want to be in the pool and if the parents got to be out there with them for, you know, obviously everybody likes to lay in the sun until they do it for five hours, then they may want to have a little shade. So I think, I think that goes a long way having, you know, just a cool, well balanced outdoor space.

Tim Grillot [00:38:06]:
So I agree on completely on that. I don’t know how many times I’ve been to pools that are just beautiful pools, but they have no shade and like put some umbrellas up or something, you know, it is too hot to be out there with no shade at all.

Avery Carl [00:38:19]:
Yeah, it does get hot after a little while. Sometimes when I’m at the pool with my kids, I’m like, oh my God, I’m so hot. It’s like burning. I’m. I’m melting. But yeah, that’s a really good point, Tim. Good, good call out for us, for.

Jonathan Lazzarino [00:38:32]:
Us pasty northern people, you know.

Avery Carl [00:38:36]:
Anything else in regards to amenities or views or anything, anything else standard that you kind of have to have, otherwise you’re not even on the playing field.

Tim Grillot [00:38:46]:
Not one, one little thing. Just to think, consider this isn’t a have to have, but if you are a condo that looks really nice and the condo itself looks great and it has great amenities, but you’re not Gulf side, just remember that you’re probably not going to be competing with gulf side condos. This isn’t necessarily an amenity. This is more the complex itself. There are some great complexes that are not golf side but great amenities. But if you have to cross, if you’re not direct gulf front and you don’t have golf, I mean you won’t have gulf views, then just, just consider that, you know, it’s in your numbers as well.

Jonathan Lazzarino [00:39:21]:
Jonathan, what do you think about the different, there’s, there’s definitely like, like in my opinion, two kinds of condo buildings. There’s high density and low density and, and it’s two different vibes and I don’t, I personally don’t think there’s a wrong answer. I mean take all the fundamentals we already talked about like the view and everything, but to me it’s kind of two different things. Like the low density ones tend to have less amenities but they actually kind of get some attraction because they are low. There’s like a, a group of people that doesn’t want all the chaos of a 20, 20 story building, you know, and, but then the 20 story building tends to have like everything. They have a gym and they’ve got multiple pools and slides and sprinkler parks and all that. So I, I kind of feel like there’s not a wrong answer there, but I don’t know what you think on that.

Tim Grillot [00:40:02]:
No, I agree with you 100. There’s really not a wrong answer. Some low density complexes can rent just as well as high density complexes. But like you said, like The Phoenix West 2 is giant and it’s got every amenity you can possibly think of and the amenities are beautiful and nice and lazy rivers and everything. But some people may complain about waiting on the, waiting for the elevator, you know, where you don’t have to worry about that. So there are pros and cons to both for sure.

Jonathan Lazzarino [00:40:29]:
Ours are, ours are low density and we get a lot of feedback that, that the guests that stay there love it, you know. Now I don’t think they, people don’t love the big ones. I think it’s just kind of a, you know, in other markets it’s like that you can have, I like to say there’s an ask for every seat, right? I mean it’s just like different people want different things and so I don’t, I, I, you know, if you’re looking at stuff, I don’t think there’s a wrong answer there. Just know that, you know, it’s a little bit different for each one. So.

Avery Carl [00:40:53]:
Yep. There’s an ask for every seat. It’s a good one. I’m gonna, I’m gonna rip that off.

Jonathan Lazzarino [00:40:59]:
That’s in my book.

Avery Carl [00:41:01]:
All right, anything else before we go related to what to buy here? We’re getting into the weeds on the income numbers on the next episode, so tune in for that. But anything else in terms of just what, what kind of properties you generally need to look for?

Jonathan Lazzarino [00:41:15]:
I guess we said at the beginning a little bit, buy a beach house. House, you know, don’t, don’t buy a brick ranch house with all, you know, weird looking furniture. You know, get something that looks beachy.

Avery Carl [00:41:25]:
So yeah, and we’ve got a later episode that’ll get into decor a little further. So. Yeah, but of course, guys, you don’t want to like, you don’t want to buy a totally grandma unit and leave it totally grandma for lack of a more technical term and, and expect it to do well. You do have to do updates and we’ve got a whole episode on that coming up towards. I think that might be episode to seven or eight. But anyway, tune into that. And guys, if you want to learn more about this market or buy with us, you can email us or you can email Jonathan at jonathan@theshorttermshop.com or agents@the Short Term Shop.com we’ll get you where you need to go. We also have a live Q A every Thursday.

Avery Carl [00:42:03]:
We call it our office hours. You can join that@strquestions.com you can come and ask us any questions that you have about short term rental investing. And be sure to join our Facebook group. It’s the same title as my book. It’s called Short term rental, Long term Wealth health. See you guys over there.