Is Buying a Short Term Rental in Gulf Shores a Smart Investment in 2025?

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 up, 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.

Avery Carl [00:00:47]:
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. Or if you know you want to buy in Gulf Shores and you’re ready to start talking to an agent, you can reach out to us@agentshorttermshop.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. So 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.

Avery Carl [00:01:23]:
Or if you want to talk to us in person, you can do that every Thursday. You can sign up@strquestions.com we have a one hour lunch hour 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 Tik Tok Facebook. Join us in our community on Facebook as well and I guess we’ll get to the episode now. Thanks guys. Hey guys. Welcome to episode one of the Short Term Shop Limited so special series on how to invest in short term rentals in Gulf Shores in Orange Beach, Alabama.

Avery Carl [00:02:09]:
Or you know, there’s some other little ones out there too, Fort Morgan, all those little areas. So got a pretty cool panel here today. The first one is our agent in that market. Jonathan, you want to introduce yourself? If you don’t say, good morning everybody, you’re going to be in deep shit.

Jonathan Lazzarino [00:02:26]:
Hey everybody. Good morning. I’m Jonathan with a short term shop in Gulf Shores in Orange beach. And I’m a realtor here and real estate investor and I’m really excited to be here today.

Avery Carl [00:02:38]:
Thank you for your involvement. So guys, Jonathan is like the most positive, happy person I have ever met. And on all of our team meetings, when he talks, he says, good morning everybody. And everybody loves it, like makes everyone’s day. So we make sure that he has to say that every time. So that’s why, that’s why I’m giving him a hard time. Anyway, next, another familiar face. Tim, go ahead, introduce yourself.

Tim Grillo [00:03:01]:
Yeah, my name’s Tim Grillo. I’m actually just here for Jonathan. It makes my day better every time I get to see him. But anyway, actually I’m an investor as well as an agent in the Smokies, but I have two properties in Gulf Shores as well as several in the Smokies. So we spend quite a bit of time in Gulf Shores as well.

Avery Carl [00:03:21]:
All right, awesome. So let’s talk about. Why would anyone invest in Gulf Shores, Alabama?

Jonathan Lazzarino [00:03:31]:
Well, I guess I’ll start it off. I know I’m very biased because I live here, but Gulf Shores is to me, the Gulf Shores and Orange beach area is not only a great short term investment because, you know, cash flows. Well. There’s a lot of tourism, around 8 million or so tourists per year. But on top of that it’s got. Baldwin county is growing very fast. So you’ve got Foley, Gulf Shores, Orange Beach, Daphne Fairhope, Fort Morgan and all these places are really have good schools. Well, some of them are improving.

Jonathan Lazzarino [00:04:03]:
But Orange beach and Gulf Shores have excellent schools. The crime rates very low. There’s great attractions. You’ve got owa, which is a great amusement park, indoor water park, Tropic Falls just open. So it’s open year round. They just put a new bar at Waterville usa that’s really cool. They’re just building so many cool attractions. The airport expansion got delayed, but it is going to be coming in 2024, so you’ll be able to fly directly in, which will only help with the off season and snowbirds and just all kinds of cool stuff.

Jonathan Lazzarino [00:04:36]:
The wharf is expanding to where the wharf is. They have this big amphitheater in Orange beach and that’s a big attraction. They just bought a whole new. They’re adding a ton of commercial space and outdoor stage and all kinds of cool stuff. So there’s just a lot of good stuff going on here and tourists love to be here. So the. That’s really good on that side too.

Tim Grillo [00:05:00]:
Yeah. To tag it on what Jonathan said there, you know, from a. It’s a. To me, it’s a classic tourist destination. You know, we talk about that a lot about, you know, investing in areas that are true vacation markets and, and Gulf Shores and Orange beach is 100 that. I mean, that area has been rented, you know, pretty much since it’s been built up. It’s been a vacation dest nation. And location wise, you know, if you basically look at it on a map, it’s way down at the very bottom tip of Alabama.

Tim Grillo [00:05:26]:
And if you’d like kind of. I like to look at it like a V. It’s just a funnel. It’s a funnel of tourists coming right down through there. You know, I mean, if you, if you draw a V and make Gulf Shores the tip and take it all the way up to the northern part of the country, those are all your, all your clients, you know, and, and more than that. But that’s, you know, when you look at the license plates, that’s where they’re from. I mean, you get everything from Michigan, Wisconsin, Minnesota, Iowa, Nebraska. Yeah, all that, they all funnel right down to that, that area.

Tim Grillo [00:05:51]:
So it’s just, it’s. And, and it’s got a small town vibe to it. You know, Jonathan mentioned all the growth, which is. It’s happening for sure, but it’s still got a small town vibe. And a lot of the complexes there, Orange beach is a little bit, they’re bigger, but a lot of the ones in Gulf Shores aren’t, aren’t like these giant mega complexes. So it’s like even like the condo buildings and stuff aren’t like completely overgrown. So. And then the public beach area is also awesome down there, you know, and there’s a, you know, a couple restaurants and stuff right there.

Tim Grillo [00:06:20]:
So that’s kind of the stuff that, you know, obviously, obviously have the beach. You know, we haven’t talked about the beach, but the beach there is like perfect white sand. You know, it’s very similar to, you know, your destin, Panama City beach, all that kind of stuff. It’s a white sand beach, nice blue water. And then right outside of the beach, I mean, you go like just up the road and there’s all kinds of other attractions there. You know, there’s, you know, all the. I’m, I’m in Tennessee. So, you know, the Things that people are used to.

Tim Grillo [00:06:44]:
Here are all the go kart tracks and mini golf and ice cream and all that stuff. And it’s all there in Gulf Shores too. There’s all that kind of stuff. I’ll be honest, I forget what they’re all called. Jonathan probably knows better. But there’s, there’s all that stuff is like literally right down the road from, from the beach. And it’s not quite walking distance, but it’s easy car ride. There’s a zoo there.

Tim Grillo [00:07:04]:
You know, there’s all, there’s just tons of stuff. It’s a kid in vacation Mecca.

Avery Carl [00:07:07]:
So yeah, so it’s Gulf Shores. So growing up in the Southeast, everybody, you were either a Gulf Shores family or you were an Emerald coast family. And it really. The only thing that differentiates those two is where your parents grew up going. And everybody from the Southeast goes on their beach vacations to either the Emerald coast or Gulf Shores. And a lot of people will flip flop between both and go to Gulf Shores one year, Emerald coast one year. There’s also a ton of. It’s a, the.

Avery Carl [00:07:36]:
I don’t want to use the word Mecca because you already use that word, but it’s a mecca for like kids sports and tournaments and stuff, like big regional soccer tournaments. There’s a lot of like cheer and dance stuff happening. I didn’t do that stuff, but my sister did and she was always having big cheer competitions and dance competitions in Gulf Shore. So there’s a lot of big kids sports tournaments meets, you know, whatever, whatever sport it is. So there’s a lot of that stuff. Like Jonathan mentioned, there’s. They are getting an airport. So now you won’t have to fly into Mobile.

Avery Carl [00:08:07]:
You could fly straight into Gulf Shores. And a lot of people don’t realize that Gulf Shores is. I, I thought Gulf Shores was in Florida until I was an adult, which is a little embarrassing to say they don’t realize that it’s in Alabama. A lot of people are like, wait, there’s a beach in Alabama. So it’s, it’s very, very similar to the Emerald Coast. Correct me if I’m wrong, guys, but I think, you know, Florida’s having a lot of insurance problems right now with, with a lot of carriers have pulled out of Florida. So Gulf being in Alabama, that doesn’t have quite as bad of a coastal insurance problem. Like coastal insurance.

Avery Carl [00:08:43]:
We’re going to get to that in a later, later podcast episode. But it’s not, it’s, it’s cheaper on the Alabama side than in The Florida side right now, Right.

Jonathan Lazzarino [00:08:53]:
From my understanding, it is. I know I’ve heard of people just not being able to get insurance in certain cases. I don’t know if that’s the case, if that’s true, but I’ve never had any clients not be able to get insurance. What you’re seeing is insurance is increased in Sally, so you are seeing premiums that have gone up. So if you’re. If you have a house and it’s not gold fortified, which means build to the latest standard that helps for hurricane prevention and our protection and lowers your insurance drastically, it can get up there pretty, pretty high. But it just depends on if it’s in a. What flood zone is in and all this kind of stuff.

Jonathan Lazzarino [00:09:30]:
And if it’s a condo, the HOA master policy is likely to have gone up. So you could be seeing a recurring insurance assessment there. But it’s still manageable, and you just have to plug it into your numbers. But we can find that out on the front end, too.

Tim Grillo [00:09:42]:
Yeah, and I agree with that. You know, ours has certainly gone up since Sally, but it’s still a very manageable amount for insurance. And I want to tag onto some of the stuff Avery’s just said there, too. Avery mentioned all the, like, kind of the cheer and sports stuff. That is absolutely a thing. We get a lot of guests that are there for softball tournaments, cheer tournaments. But another thing. And I kind of talked about the public beach, but just.

Tim Grillo [00:10:04]:
Well, just in general, like, one of the cool things about vacation towns is that’s generally the major revenue stream for the area. And Gulf Shores is actually, is definitely that. And with that, you get the benefit of, like, kind of the chamber of commerce working for you. So they actually, you know, a lot of their focus, instead of being like, you know, how can we bring in more factories or this or that. Their. Their focus is how do we bring in more tourism. And I found that Gulf Shores does a really good job with that. So outside of, you know, they’re the ones that are lobbying for a lot of those, you know, tournaments and all that kind of stuff.

Tim Grillo [00:10:36]:
But they also do a lot of really cool festivals. And there’s. There’s a. There’s a restaurant bar down there. It’s called the Hangout. And it’s like, basically, you know, when the. The main road coming into Gulf Shores basically is a T intersection and it tees up and then you go right or left and right. That t is the public beach and the Hangout.

Tim Grillo [00:10:54]:
And that’s like, everybody references. How far are you from the hangout, and the hangout does these awesome freaking on the beach music festival, shrimp festival, every kind of festival you can imagine having on the beach, they do it. And the cool thing is they actually put some planning into it. Like they’re not doing it in the middle of July when it’s already slam packed busy. They kind of do it on the shoulder seasons, which helps bring in more people when it would normally be slow. So that’s another cool thing I’ve really noticed is we get a lot of like, we think it’s going to be slow and then all of a sudden like we look at our price labs and the prices are really high. And I’m like, what’s going on? You’re like, google what’s going on in Gold Shores. And it’s some kind of festival.

Tim Grillo [00:11:29]:
And you know, price Labs has already caught it. My prices are already up there. And we get these little boosts of activity throughout the year based on when those festivals are. So, you know, that’s, that’s been a really cool thing for us. Our place is right on the beach and we’re pretty close to hang out. So it’s definitely been an impact.

Avery Carl [00:11:46]:
Yeah. And to get kind of give some context to that, I think it’s called Hangout Fest. Right. Hangout Fest is pretty big. Like it’s a big festival. It’s not just like a bunch of.

Tim Grillo [00:11:55]:
Red hot chili peppers.

Jonathan Lazzarino [00:11:56]:
Yeah, there’s, there’s little Nas X. Who. I don’t really know who that is, but he was talking about how beautiful the beaches are, and I think he’s pretty big. And. Yeah, and I know we keep talking about sports tourism, but I just had some numbers from a place in Foley that was by the Foley Sportsplex, and the numbers were good. I mean, sports tourism is a big thing. Fishing, you got some of the most diverse wildlife in Mobile Bay. Little lagoon fishing, you know, you got charter boats everywhere.

Jonathan Lazzarino [00:12:26]:
So there is a lot of attractions. The beach is the biggest attraction. But there’s so many other things, like Tim was saying that, you know, everybody can have had fun here.

Avery Carl [00:12:37]:
Yeah, it’s, it’s. So there’s a lot of stuff to do. A lot of reasons that people would go there. Let’s talk a minute about regulations and this being a true vacation market. So there’s not a lot of people like most true vacation markets, not a lot of people that live in Gulf Shore is a primary home. And when I say Gulf Shores, I mean, you know, the entire area that includes Orange beach and some other Places. But let’s talk about that real quick.

Jonathan Lazzarino [00:13:01]:
Right. So the regulations are very well established, which I like. I mean it helps give a good balance between residential and you know, and tourism here. So in, in Gulf Shores, you know, second Avenue and South, you’re good to go. And that I don’t really foresee that change in ever. I mean if anything it may go north, but I doubt that in Orange beach there’s a few puds, a few planning and developments that allow short term rent. Otherwise you’re just right on the beach. All those big condos like the Phoenixes and everything.

Jonathan Lazzarino [00:13:30]:
Fort Morgan’s a little different because you’re kind of out in the wild west a little bit over there, but it’s still. You can short term rent anything unless there’s like one Hoa Bay Gardens that you can’t short term rent. But it’s pretty much anything’s good to go over there and, and that’s very unlikely to ever change because it’s mostly investments there. There’s very few in second homes. There’s very few residents that actually live in that area.

Tim Grillo [00:13:56]:
Fort Morgan’s another one. That’s awesome. We haven’t really touched on that hardly. But like it is like a tiny little town. I don’t know how to describe it but like you get to Gulf Shores and if you get tired of all the, all the action, you can just head on over to Fort Morgan. It’s super calm and chill and everything else.

Avery Carl [00:14:12]:
So yeah, and there’s not a lot of hotels around, kind of, you know, in the true vacation market vibe really. Not a lot of primary homeowners, not a lot of hotels. The area is very dependent on tourism, so there’s not a lot of other industry there for people to work in that do live there as a primary residence. So the entire area is very dependent on tourism, which makes it a great place in terms of future regulations. Now nobody can ever say with 100 certainty that regulations will always be favorable slash won’t change. But the two primary drivers of anti short term rental regulation are primary homeowners whose income does not depend on the tourism market and the hotel conglomerates. So not a lot of either of those things here. So pretty good positive outlook on what regulations will be in the future.

Avery Carl [00:15:03]:
However, Gulf Shores and Orange beach do have some pretty specific zonings for short term rentals. You want to talk about that real quick?

Jonathan Lazzarino [00:15:12]:
Well, well pretty much just second Avenue and South and Gulf Shores, you’re good to go. There’s a few little. I mean it’s if you look at the map, there’s a few little areas that once you get west of a certain area that, that are kind of north of second Avenue but, but they are very well defined in Gulf Shores and then Orange Beach, Perdido Boulevard and South you’re good to go. Besides a few puds, there’s some planning and developments that, that allow it. So. So yes, they’re very well defined and you know I talk to zoning all the time. I don’t really since any of that ever changing personally. But nobody can guarantee it like you said.

Avery Carl [00:15:49]:
Right. And they are pretty darn strict on if you try to rent something that is outside of those zones. So this is not a market to try and bend the rules. They will find you and you will be in trouble. Do you guys have any experience with that or like have anything to add to that? I just know they’re pretty strict about it. There’s.

Jonathan Lazzarino [00:16:10]:
Yes, I’ve known people that have tried to do that.

Tim Grillo [00:16:13]:
It does not. I like your face on that one, Jonathan. Your face said it all. For those that aren’t watching, you definitely cannot.

Jonathan Lazzarino [00:16:21]:
If it’s not zoned for short term rental, you can’t do it here.

Avery Carl [00:16:23]:
Yeah, just don’t in. I would like to think that people listening to this show are all good decision makers but in any market it is not a good idea to try it and skirt the rules. It’s usually just going to cost you time, money and probably other things. So just don’t, don’t mess with it. Make sure you’re buying in an area that’s zoned. So let’s talk about. And we’ll get more into this in the next episode. But Orange beach is a little bit stricter than Gulf Shores in terms of how much area there is for that’s allowed for short term rentals.

Avery Carl [00:16:55]:
Or am I making that up?

Jonathan Lazzarino [00:16:57]:
No, it’s, it’s really, it is true because I mean the whole city has a 180 day minimum restriction but it’s. Except for those exceptions like close to Perdido Boulevard which you do have a lot of condos. You have a lot of those big high rise condos like Tim was talking about like the phoenixes and turquoise plates and a lot of these places in, in Orange beach. But I just bought one in a PUD that’s kind of close to the wharf because I’m looking for the long term game there with the expansion and everything. And that’s one of the very few puds that’s within the city where a lot of the residents live. So it is, it is pretty restrictive if you look at the whole population of Orange beach. But it’s. There’s still a lot of short term rentals to look at.

Avery Carl [00:17:41]:
Yeah. And what else have we missed on the market as a whole?

Tim Grillo [00:17:47]:
Can we talk about the food?

Avery Carl [00:17:49]:
Oh yeah, let’s talk about the food.

Tim Grillo [00:17:51]:
The food’s awesome. I mean, I mean, I love going down there to eat. Honestly, it’s kind of a weird thing. Like Gulf shores has got like a. It’s a mix between like your classic gulf seafood stuff mixed with a little bit of New Orleans. And so if you like New Orleans style food, like, if you want to get a good po boy and stuff, there’s like a million places down there to get it and it’s. It’s fantastic. So.

Jonathan Lazzarino [00:18:15]:
Absolutely. There’s a lot of seafood here. Then they, they keep putting up new restaurants. There’s a new Italian one that’s really good. And I hate to get off the food subject, but there is. I forgot to talk about. That’s a really big attraction that I really just discovered. But the Gulf state park, it’s one of the most beautiful state parks I’ve ever seen.

Jonathan Lazzarino [00:18:33]:
And I love state parks, but my wife and I just got addicted to e bikes whenever we can get a chance. And you can, there’s gators that you can just ride by and see gators swimming in little water holes, shaded, beautiful trees everywhere. You can ride your bikes to the beach. There’s restaurants where you can play, have some drinks and play games and stuff. And it’s just that in of itself is a. Is worth coming down here to check out in my opinion. Just that one attraction too. But the food back on the food.

Jonathan Lazzarino [00:19:05]:
You know, there’s so many good, good places to eat here. Zeke’s Landing. I mean, I could go on for days about that.

Avery Carl [00:19:13]:
Yeah. I mean it really is the best culture that Alabama has to offer, in my opinion.

Tim Grillo [00:19:18]:
It’s an interesting culture for sure. I love it down there. It’s. I fit in. So that’s good.

Avery Carl [00:19:23]:
Yeah. Yeah. So what else? So most people. I think we’ve already kind of touched on the new. The new airport coming in. But the majority of people are driving in to Gulf Shores, right? Most people are driving, yeah.

Jonathan Lazzarino [00:19:38]:
Historically for sure. You know, 25 plus years, it’s been a very well trafficked regional market as far as people driving here.

Tim Grillo [00:19:47]:
It’s a really popular. You know, I don’t know if you want to go into this, but it’s popular too. And this Goes back to the driving thing a little bit, but it’s really popular in the wintertime time for snowbirds. If you go down there in the winter, the average age is definitely a lot different than it is in the summer and but it’s, it’s, it’s known to be somewhat affordable, you know, if for people that live up in the great snowy north, they can go down there and hang out for a month or two and stare at the ocean instead of staring at six feet of snow. So you know, you go down there in winter time. It’s, it’s. And they’re, they’re pretty well set up for it, you know, and all the restaurants and everything kind of know it. So they, you know, they run all their, you know, four o’ clock specials which I’m not, I’m not too ashamed to go to.

Tim Grillo [00:20:25]:
But there is, it’s, they again they just do a good job of catering to keeping tours coming in. You know, it is a true vacation market.

Avery Carl [00:20:33]:
So yeah. Trying to think of what else we might be missing in terms of just why people visit, why you would come this. I knew that I told you guys this one was probably going to be a little bit of a short episode because it’s pretty easy to cover why people come to a beautiful beach to vacation and kids sports and really great food. I’m a big fan of just Gulf coast food in general. Grouper sandwiches. I could live off grouper sandwiches for the rest of my life. So that may be about it.

Tim Grillo [00:21:06]:
Dolphins are down there. I mean we got that.

Avery Carl [00:21:08]:
We have dolphins.

Jonathan Lazzarino [00:21:10]:
Dolphins are every. We actually discovered that right by, on the bayside by our RV park. There’s our dolphin breeding ground. There’s baby dolphins that are there all the time. It’s really. Wow.

Avery Carl [00:21:21]:
Oh my gosh. Jonathan, did you tell them about your RV park?

Jonathan Lazzarino [00:21:26]:
Oh yes. Well, no, I haven’t, but we have.

Avery Carl [00:21:29]:
Let’s go ahead, just talk about it.

Jonathan Lazzarino [00:21:31]:
Yeah, we, we have an RV park in Fort Morgan and some short term rentals there and it’s. And speaking of the snowbirds, we have some great snowbirds that come and keep it packed out during the winter and it’s, it’s really cool. It’s on the bayside and, and we love it.

Tim Grillo [00:21:45]:
It’s awesome.

Avery Carl [00:21:47]:
Awesome. And what that actually reminded me. So this is an area where there is the Gulf side and the lagoon side. So can we talk a little bit about that? And we don’t have to go too much into like which makes more money but there’s stuff to do on both sides. Whereas like over on the Emerald coast, people don’t really go to the bay at all. But I think that’s different over here. So let’s talk about that a little bit.

Jonathan Lazzarino [00:22:10]:
Well, there’s a bunch of bodies of water, so. So if you’re in Fort Morgan, you’ve got the Mobile Bay on the north and then the Gulf on the south. Gulf side is always going to rent the best. So anything that’s close to the Gulf is gonna, you’re gonna see higher numbers but also higher price points. If you’re on the bay side, like there’s some great little communities like the Rookery, I’ve post them there. They’re going to rent well, but they’re going to be at lower price points. So even though you’re not renting for, you know, the same as if that same property was moved to the Gulf side and walkable to the beach and you’re still able to get a nice return. I mean if the price point, if it’s priced well.

Jonathan Lazzarino [00:22:45]:
So the Mobile Bay is great. But then if you go into west beach and you keep going down the to the west, you have the lagoon to the north and then the Gulf to the south of the lagoon is a different body of water. And on the little lagoon you can do all kinds of water activities too. A lot of people, you know, jet ski, you know, do all kinds of stuff on there and just great fishing.

Tim Grillo [00:23:06]:
I’ll say there’s a lot of fishing there.

Jonathan Lazzarino [00:23:08]:
Yeah, tons of fishing. I mean that’s a big, a lot of tourists come just to fish here too. And then if you get into Orange beach, you got Wolf Bay and all these other bays there that those are mostly what locals use because most of those aren’t short term rentable on in that part. So you’ll see a lot of locals on boats there. But. But yeah, definitely a lot of cool different bodies of water. But as far as rental numbers, you’re almost always going to see the highest numbers on the Gulf side.

Avery Carl [00:23:37]:
All right, well I think that is a really good stopping point because episode two is on what to buy and why. So we can just segue right into that. So guys, if you guys are interested in learning more about investing in short term rentals in the Gulf Shores area, there’s a few ways that we can teach you more. So we have a live Q and A every Thursday. We call it our office hours. You can sign up to join that and ask us any questions that you want@str questions.com or you think you know enough and you want to just go straight to Jonathan and start looking at properties, you can email him at jonathan@theshorttermshop.com or you can always get us@agents the shorttermshop.com. and don’t forget to join our public Facebook group. It’s got the same title as my book.

Avery Carl [00:24:21]:
It’s called short term Rental, Long Term Wealth. And we will catch you guys on the next episode.

Jonathan Lazzarino [00:24:32]:
Sam.