How Much Do Short Term Rentals Make in Gulf Shores? (2025 Data Breakdown)

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.

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 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. Thanks guys.

Avery Carl [00:01:56]:
Hey all. Welcome to episode three of our limited series on investing in Gulf Shores. Almost forgot what market I was talking about. Sorry about that. I’ve got the same cast of characters as episode one and two, except we are adding Mr. John Bianchi to the mix. John, you introduce yourself.

John Bianchi [00:02:16]:
Sounds good. Thanks Avery, for having me. I love doing these little miniseries on these different markets. My name is John Bianchi. I’m the Airbnb data guy. I am the head of data for TechVestor, which is the largest short term rental investment fund in America. I also have my own Airbnb data consulting company where I help people find profitable properties. And I have a bunch of free courses on YouTube as well.

John Bianchi [00:02:39]:
So, yeah, that’s. I pretty much live and breathe Airbnb data. That’s all I do.

Avery Carl [00:02:42]:
All right, just the person we need for an episode like this, so let’s dive into it. So, guys, just as a disclaimer, we’re only talking about income numbers on this episode. We are talking about expenses in the next episode. So don’t come away from this episode going, well, they didn’t say anything about expenses. We got a whole episode of that for y’ all. So we’re just talking about income here and we have a few, just quick definitions we want to go over that a lot of investors throw around when they’re talking about analyzing these things. Cash on cash return, cap rate. No, I.

Avery Carl [00:03:17]:
A bunch of different things. So does anyone, anybody, anybody. I try to say anyone and anybody at the same time want to take a stab at what cash on cash return is? Or.

Tim Grillot [00:03:28]:
I can, I can if you want.

Avery Carl [00:03:29]:
I mean, go for it, Tim.

Tim Grillot [00:03:31]:
All right, so cash on cash is basically when you look at your, your total net number from a specific year, usually, you know, a lot of people look at it in year one and divide it into the total amount of, of money that you put into that property. So you take your total net and divide it by what you, what you put in and it’ll kick out, kick you out of a percentage and that’s your cash on cash return. So it’s a great, it’s a great way to measure like a snap in time. I, I use it. I don’t think it’s the end all be all, you know, because people sometimes were like, oh, is this, this year? Is this, is this different? It changes all the time, you know, and so it’s a great way to, when you’re buying a new property to get a snapshot of what it looks like on that day. So it’s fantastic. Just kind of a measuring stick of a property. And for short term rentals, it’s a great measuring stick because it’s just kind of knowing where you’re at and gives you a point of reference for making improvements and things like that.

Tim Grillot [00:04:23]:
So.

Avery Carl [00:04:23]:
All right. And that is typically the best. There’s no exact perfect way to measure the performance of a short term rental. But cash on cash return is kind of the best we have at the moment till somebody comes up with a new formula and I want to do.

Tim Grillot [00:04:39]:
It, I want to touch on that a little more. Sorry, go ahead. No, it wasn’t super clear. So when I say the amount of money you put in, it is not the purchase price, it is your like what the money you put, your down payment essentially and then any other upfront cost. Usually it’s usually your down payment. Your closing costs is usually what goes into cash on cash. So it’s the cash out of your pocket you spent, not, not the purchase price. I just wanted to clarify that.

John Bianchi [00:04:59]:
So out of curiosity, Tim, would you also include your furniture costs in that in any renovation costs?

Tim Grillot [00:05:05]:
It kind of depends. I’ll say loosely, yes, but generally most of the properties that we’re looking at are pretty turnkey. If you’re looking at a renov, then yes, I do, I do kind of figure that in. You know, if you’re looking at planning on a renovation right out of the get go, then yes.

John Bianchi [00:05:21]:
Okay.

Avery Carl [00:05:21]:
Yeah, so that’s a really, really good point, Tim. So if you guys are looking at a value add property and it’s really important to not try to mix different strategies and different ways to measure things because you’re almost always going to be wrong in one area or another. You kind of can’t have everything. But if you’re buying a value add Property that needs 20,000, 30,000 worth of work, but when you’re done, you’ll be able to make X amount more and the property will be worth 100,000 more. Well, your cash on cash returns not going to look really good if you’ve got a 30 to $50,000 renovation right out of the gate. So if you’re doing something like that, cash on cash return in year one is probably not what you’re going to want to look at. So I’ve seen people who say, you know, I want to do a value add, but this is my first investment. And they’re like, well, I can’t make the cash on cash return numbers work.

Avery Carl [00:06:07]:
Well, that’s because of the value add. So do it. Year two really thing on that too.

Tim Grillot [00:06:13]:
Is, you know, that can vary wildly on how you financ the property. If you go into a value add property and the like, if it’s a major one and the bank knows it, you’re not going to be getting a normal loan and you might even be using like a rehab type loan. So again, that Money may not even be coming out of your pocket, you know, it could be part of the loan structure when you’re buying a property like that. And I’ve done several of those myself, you know, so, you know, in that case, you don’t take such a beating because it’s not coming, you know, it’s part of your loan. It all gets rolled up into it. So it just depends.

Avery Carl [00:06:40]:
Yeah, yeah. And another, another one that a lot of people use is cap rate. And I’m not going to get too far in the weeds on this because I don’t want to confuse any, any listeners, but cap rate is a way to measure the profitability of a property. It typically is best utilized in commercial real estate. Short term rentals are still residential real estate as of today. That could potentially change in the future as the asset class continues to grow and establish itself. But in commercial real estate, the appraisal value of a property is determined by the income of that property. And that’s what cap rate measures.

Avery Carl [00:07:17]:
So the higher the cap rate, which is determined by the income and a few other things, the higher the cap rate, the more the property is worth. In commercial, when you come over here to residential, which is where short term rentals are, the appraisal value of a property is determined based on residential sold comps. So if you have two houses next door to each other, one makes 100,000 a year and one is not a rental at all, make $0. And the not rental just sold for X amount. The rental is also worth X amount because it’s based on residential sold comps. So it’s kind of a weir asset class because yes, the income can determine how much an investor will pay for a property. But as far as the appraisal value is concerned with the bank, it’s still appraised based on residential sold comps. So while it can help to know what the cap rate of a property is, it really doesn’t matter as much as when you’re, as when you’re looking at cash on cash return.

Avery Carl [00:08:11]:
Another thing that. God, y’ all, Sorry. With the ums today, I’ve been off for a few weeks, so I’m trying to get back into it. So let’s talk about cash flow. Because cash flow, you can either invest based on what your cash on cash return is going to be or what the cash flow is going to be. And they are inversely proportionate to one another. So does anybody want to take that or I can.

Tim Grillot [00:08:32]:
Well, it’s kind of exactly what you said. I mean, if you put, the more money you put down, it actually hurts your, your cash on cash calculation because you’re putting more money. You know that your net is probably going to stay about the same no matter how much money you put down. So it hurts your cash on cash calc. However, because you’re putting down so much more, typically your mortgage is going to be less or even zero if you pay all cash for the property. So that would, you know, your cash flow in your hand is going to be more that way where conversely, like you said, if you do a minimal amount down and use, you know, leverage the property completely, your cash on cash is going to look fantastic. But you may have little to no cash flow. So it is a, it is a very fine balancing act.

Tim Grillot [00:09:12]:
It’s another one of those things where there’s not a wrong answer other than what is important to you. You know, I mean, I’ve had a lot of clients that go on both sides of that fence. I’ve had CL that like they don’t even care about the cash flow because they’re in it for other reasons. And I’ve had clients that that’s all they care about is the cash flow. So cash on cash, you know, they may not have a lot to put in up front. You know, it’s just, it’s a balancing act. You got to figure out what’s right for you. So, but you’re right, it’s one or the other.

Jonathan [00:09:34]:
I had a client that just closed on a four bedroom and before the summer and he didn’t have enough time to do what he wanted to do during the summer. But he was going to close in this other area, make it a five bedroom. So during the off season he’s going to be spending more cash in his first year. So it is going to affect his cash on cash return, no doubt to do that renovation or the upgrade. But next year he’s going to make significantly more money by doing, by adding an extra room. So is it a bad thing that he’s getting a bad, not as good cash on cash this year? I mean, I don’t think so because next year it’s going to look pretty good.

Tim Grillot [00:10:10]:
I think that nails why it’s important to understand the metrics. But don’t live and die on one, you know, just understand what they are and you got to use that as a tool to help you make decisions. You know, it’s. But there’s not a singular, this is the absolute, you know, yes or no answer to it.

Avery Carl [00:10:24]:
Am I going to buy this property Right, right. And you might change which metric you use over the course of your investing career. So when I first started and we were scraping pennies out of the bottom of my purse and like out of our cars and stuff to make down payments, the cash and cash was really important to us because we needed as much leverage as possible because we didn’t have the cash to make big down payments. Now that we’ve been doing this a long time, we’ve got a lot of properties, we’ve got more cash available to invest in things. We’re really more concerned with cash flow and how much is this going to add to our monthly income per month than the actual cash on cash return. And I’ve seen, I had a client one time who they wanted to put down 30%. They said we’re going to put 30% down because we want to increase our cash flow. We said great.

Avery Carl [00:11:06]:
And they said, but I can’t find any deals that are above like X cash on cash return. Well, like, well it’s because you’re putting down 30%, cut that to 20 or cut it to 15 and your cash on cash return will double. So you kind of can’t have the best of both there. You kind of have to decide which one is the most important. And also in terms of finding deals, it’s years ago in the early adoption days of self managed short term rental properties, there were deals just laying around on the MLS that would do 40, 50% cash on cash return. Before there were a lot of sophisticated operators and self managers around. Now that the asset class is really, really established, it’s really, it’s more similar to investing in multifamily in terms of finding deals than it used to be. And here’s what I mean by that.

Avery Carl [00:11:55]:
So in multifamily you’re not going to go find an apartment building in most cases that has a really high cap rate. But what you can find is an apartment building that needs some updates that you can increase that rent to then increase the cap rate. So you’re looking for the opportunity rather than the whatever’s laying around doing X amount same thing. Now with short term rentals you’re not necessarily going to find that super high cash on cash return property just sitting there already performing at that level. But you can find opportunities to buy a property that can get to that level. You just have to look for the opportunity of the deal rather than what it’s doing right this second.

Tim Grillot [00:12:32]:
Yeah, I like to use the word, you know, income potential. You know, you’re looking for what, you know, not just what, what. What it stands today, but what’s the income potential? This once I get my hands on it and do our thing to it and put our own personal spin to it.

Avery Carl [00:12:43]:
So I like that word.

John Bianchi [00:12:45]:
Yeah. Which I just want to mention. That’s my entire world. That’s all I do.

Avery Carl [00:12:48]:
Income potential.

John Bianchi [00:12:50]:
Income potential. Trying to find the. The best potential property that you can get used to be easy, but now it’s not. And so you really have to understand the data to be able to make a good decision based off of, like, what you’re. What other people are doing. Right, Right.

Avery Carl [00:13:02]:
Yeah. So, John, let’s hear from you. Let’s first hear from how you have looked at and analyzed the data, kind of what your process is, and then we’ll move into some more specific questions.

John Bianchi [00:13:12]:
Okay. So for myself, I always pull a report for every area that I look into, and it’s my own reports. So I pull those reports out and, you know, I’m able to see all of the data from each different location and bedroom size. And so I always like to look at all of the data on a bedroom by bedroom count. And then what I like to do is go through who’s from. I like to go through a certain bedroom count. So it’s like all the four bedrooms, and I go from who’s making the most to who’s making the least. And what I’ll do is I’ll analyze each one of the homes to try and figure out why some people are making more than others.

John Bianchi [00:13:48]:
And really what I’m just looking for is some sort of pattern to tell me what my home needs to look like to be able to hit an X amount of revenue.

Speaker E [00:13:55]:
Right.

John Bianchi [00:13:56]:
And as an example, you know, going through the four bedrooms for the Gulf Shores area, to make over a hundred thousand dollars, you have to have a home that’s along the water in some sort of way. At least that’s what I was seeing with the data that I was doing with the research that I was doing.

Speaker E [00:14:11]:
Right.

John Bianchi [00:14:12]:
And then if you were to make a little bit under a hundred thousand, sort of between that like 75 to a hundred thousand, you’re. You’re starting to see homes that are more so in these, like, HOA communities a little bit further off the water, but they’ve got a pool, they’re kind of all very similar. They’re in a little shared area.

Speaker E [00:14:26]:
Right.

John Bianchi [00:14:26]:
And that’s where you’re kind of getting revenue or homes that are hitting those. That revenue.

Speaker E [00:14:30]:
Right.

John Bianchi [00:14:31]:
And so I’m doing That first to get a feel of what the homes look like, what’s working, what’s not.

Speaker E [00:14:37]:
Right.

John Bianchi [00:14:37]:
And then what I’m trying to do is I’m always trying to figure out what is the absolute best thing to purchase within this area. So I’m now that I know what the homes look like and how much revenue they’re driving, I’ll then go on to Zillow and I’ll take a look at how much those homes cost.

Speaker E [00:14:50]:
Right.

John Bianchi [00:14:50]:
And I’ll try and figure out where’s the biggest inefficiency. In other words like where can I make the most amount of revenue for the least amount of dollars in. And I’ll do this across all the different bedroom counts to try and figure out where the most opportunity is. And as a, as a quick summary, if I were to be going into Gulf Shores, I probably would be looking for a two bedroom condo that had waterfront views because two bedroom, two bath condo that had waterfront views. That was designed really well because from what I was seeing that they were reasonably priced and they had a very consistent revenue potential. Meaning that you know, a two bedroom could almost make as much as a three bedroom if not more for whatever reason.

Speaker E [00:15:30]:
Right.

John Bianchi [00:15:30]:
It always tends to be the, the reason is usually based off of the type of guests that are traveling there. So in other words it’s, it’s like a small family. They only have one, they only need two rooms and they’re just looking for a great condo and they’re going to get a two bedroom and they end up renting out that one.

Speaker E [00:15:44]:
Right.

John Bianchi [00:15:45]:
So anyways, that’s sort of my, my process and where I landed when it came to what I thought was the best. I can go into more detail but I’m trying not to. So I’m trying to keep it simple. But if you want to ask any additional questions, just let me know.

Avery Carl [00:15:59]:
Hey.

Jonathan [00:15:59]:
Hey John. I gotta. Thanks for all that info. That’s great. I got a follow up question. Just like Tim has a one bedroom, correct me if I’m wrong, but it has built in bunks. So I have noticed that the numbers that, that I’ve seen from people managing those can be comparable to two bedrooms. Have.

Jonathan [00:16:16]:
What’s your thought on that?

Tim Grillot [00:16:18]:
So I think that falls into sleeping capacity. You know, it’s a one bedroom with built in bunk beds in the hallway which acts kind of like a second bedroom and then it’s got one and a half bathrooms. So it kind of falls into that. It’s tickling a two bedroom.

John Bianchi [00:16:30]:
So I tickling a Two bedroom.

Tim Grillot [00:16:33]:
I like the word tickle.

John Bianchi [00:16:34]:
So I use a lot. Just pictured a one bedroom. Taking on the two bedroom. No. Well, you can def. From what I was seeing with the data, you can with a one bedroom definitely make as much as the two bedroom. But it kind of goes to what Tim was just saying where it’s like you’re, you’re almost tickling a two bedroom. Right.

John Bianchi [00:16:52]:
Like you’re getting really close to it with the, the occupancy and like what you’re doing. So I definitely see the potential there. Now mind you, I don’t have any homes there, so I haven’t analyzed the data for like weeks on end. I’m doing my, my, my process of like trying to get a good grip of the location before we hop on this call. Right. And what I was noticing and Tim, you’d probably be better or John, Johnathan, you’re probably better at this as well is I was actually seeing that the one bedrooms were almost the same price as the two bedrooms. And the, but the, but the one bedroom revenue was consistently more. So like $20,000 less on average.

Speaker E [00:17:28]:
Right.

John Bianchi [00:17:28]:
I’m not saying that a one bedroom couldn’t do as well as a two bedroom, but I’m just seeing on average they’re a little bit lower. So are you seeing that one bedrooms are fairly close to two bedrooms for purchase price?

Jonathan [00:17:37]:
It’s very dependent on the complex. There are some that are pretty significantly off which I feel like there is some value there if it’s a pretty good bit off of the purchase price from a two bedroom. But there are certain instances where they’re, they’re pretty close in price.

John Bianchi [00:17:52]:
Yeah, it seemed like that when I was going through and I just, you know, once again, quick glance, but I was looking at them like man, I’d be getting a two bedroom for sure.

Speaker E [00:17:59]:
Right.

John Bianchi [00:17:59]:
And then the, but the three bedrooms seemed quite a bit more expensive.

Jonathan [00:18:02]:
The three bedrooms definitely are more, a good bit more expensive than the twos.

Speaker E [00:18:06]:
Right.

John Bianchi [00:18:07]:
So then therefore the twos being the best potential thing, right? Because the three bedrooms is so much more and the one bedrooms are kind of close to the two bedrooms. But the two bedrooms have a lot of revenue potential. But once again, if I’d be doing it, I’d be just trying to get that one that had the ocean front view. Kind of like where you can take a photo of the living room and the entire screen to the outdoor is all blue, you know what I mean? Because it can, it’s all just staring right at the water. So anyways, that would be my, my go for, for that area.

Avery Carl [00:18:32]:
I like that, I like that a lot. Because that means this is an area that you can, it, it’s a blue chip area, but you can still get into it without having to go over a million necessarily, which a lot of blue chip markets are like now.

John Bianchi [00:18:45]:
Yeah, that was the, the part that was kind of getting me where I’m well, these homes, you know, at the top, the best of the best, the four bedrooms, five bedrooms, you know, even the single family, three bedrooms, they look amazing. They’re on the water, they’re producing a good amount of revenue. But, but I’m looking at how much they cost. I’m like, well, this is sort of, this is for the person that’s not looking for cash flow, let’s put it that way. If you, if you want one of those homes, you’re not, you’re not looking for cash flow, but if you’re one of the, you know, somebody who is looking for cash flow, that two bedroom is probably what makes the most sense. So that’s my take.

Avery Carl [00:19:15]:
I love that.

John Bianchi [00:19:16]:
Are we also discussing Orange beach on this or just Golf shores?

Avery Carl [00:19:19]:
Yes. Okay, what do you got?

John Bianchi [00:19:20]:
So Orange Beach, I actually was looking up the data for there as well, obviously. And when I was looking at the home values, it looked like the, the two bedrooms were literally like a hundred to $200,000 more on average than in Gulf Shores. Is that accurate?

Jonathan [00:19:35]:
Well, they’re pretty scarce when it comes to housing in Orange beach is available. And yes, one of them is like Beach Village Resort. Those two bedrooms are definitely up to the price. Even three, you know, three bedroom, really nice condos and some three bedroom houses even in Gulf Shore. So yes, the, I would say that they are more expensive in Orange beach for sure.

John Bianchi [00:19:57]:
Okay. So that’s what I was seeing as well. But then the revenue wasn’t much higher. It wasn’t like, you know, you spend an extra $100,000 in Orange beach and you make the proportionate amount more it seemed like. So in other words, Gulf Shores two bedroom just seemed to be the, the thing to purchase within the entire area. Not trying to say that nothing else was worth purchasing, but my job is always to try and figure out like what’s the best.

Speaker E [00:20:19]:
Right.

John Bianchi [00:20:19]:
And so that’s where, that’s where I kind of landed as to what I thought was the best.

Avery Carl [00:20:23]:
What’s the second best?

John Bianchi [00:20:24]:
Probably a, that’s a good question. I was about to jump right into it, but I’m like a one bedroom.

Tim Grillot [00:20:31]:
That tickles. A two bedroom.

John Bianchi [00:20:32]:
Yeah, there you go. Tickling one bedroom that are a three that are like a three bedroom condo. I don’t know. So the like the coolest real estate to own down there is obviously a single family home.

Speaker E [00:20:44]:
Right.

John Bianchi [00:20:46]:
Maybe the second best. If you, if you say you didn’t want to go with a condo then what I would be looking at is a three bedroom probably in an hoa. So not on the water, not and sort of in an hoa, had some sort of community pool, was not too far of a walk to the beach. So you’re still like walking potential but you’re not, you’re not like looking out at the beach.

Speaker E [00:21:04]:
Right.

John Bianchi [00:21:05]:
And I would go three bedroom because honestly like the, the single family homes that were three bedrooms compared to fours and fives, there was not a huge difference in the amount of revenue being made between them. And you want to see a huge difference if you’re paying up quite a more to go to a 4 to 5.

Speaker E [00:21:18]:
Right.

John Bianchi [00:21:19]:
So therefore if you can get a 3 and still make a good amount of revenue, just get the three.

Speaker E [00:21:23]:
Right.

John Bianchi [00:21:25]:
And then once again like being walking distance rather than like on the beach is a lot cheaper, more affordable and if you’re in the hoa, you’re going to have the community pool. So to me that was like sort of the sweet spot where I was like you because I did find a four bedroom home that was under a million that had the potential to almost hit 100,000 and it’s like, well that’s a nice combo, you know what I mean? In comparison to the two million dollar on the beach home, that’s not gonna cash flow for you at all.

Tim Grillot [00:21:50]:
So anyway off the, you know, off the ocean or off the Gulf, you know, walking distance for a Stanley home. I mean you that the on the, on the water single family home is by no arguments the second piece of property you can get from a just sex appeal, you know, but I mean from an investment stand and I go on, I think going back is a lot better.

John Bianchi [00:22:12]:
Agreed. And there’s something else I was gonna say on that as well. Oh, if you’re gonna do that, I like strongly recommend that you have a sort of like a drone shot image or even just like Google Satellite screenshot and then show how far away of a walk you are to the beach. I think that’s a, that’s a game changer thing that you can show because like if you can’t see the beach from your, from the home but you’re still walking distance, make sure people Know that. So that they’re like, okay, well this is still like, like a lot closer. And it’s a fraction of the cost of this other home, you know what I mean? That is on the beach. So it’s like we just take five minutes to walk there. I always see that one as an important image to have.

Tim Grillot [00:22:46]:
I agree.

Jonathan [00:22:48]:
John, on these houses you looked at, did you look into Fort Morgan also or is it just within the city of Gulf Shores and Orange Beach?

John Bianchi [00:22:55]:
I actually just did Gulf Shores in Orange Beach. Oh, okay. Okay.

Jonathan [00:22:59]:
I was just curious because there’s some houses like in Fort Morgan, if you go to the west, there’s a bunch of houses that a lot of my clients are hitting really nice numbers that, that are not in the hoas or anything, but they just have really good beach access. They’re just on these little streets very far west. I mean, there’s really nothing around them. I mean, there is tacky Jackson, some restaurants, but they just pet friendly rentals and they do incredibly well from. From what my clients are reporting.

John Bianchi [00:23:25]:
Interesting. I. I wish I did a little more research. I’d have a better take on it.

Tim Grillot [00:23:29]:
But no, I agree. I mean, like, it’s. It’s weird down there because you go from Orange beach to Gulf Shores to Fort Morgan and the landscape quickly changes and just the whole feel of it changes. And the, the single families are definitely more favored the further towards Fort Morgan and into Fort Morgan. You get so interesting.

John Bianchi [00:23:48]:
Cool. I. I wish I looked more into it. I wish, I wish I could.

Jonathan [00:23:51]:
Oh no, this is great info. I just was curious if he had looked at for more.

John Bianchi [00:23:54]:
Yeah, there was something else I wanted add in here too. And, and this is sort of the part that I feel like it’s missed the most when it comes to analyzing comps is people look at like four bedrooms and they’ll go, well, you know, this place has four bedrooms. I have four bedrooms. Therefore, I’m going to make the same amount of money. I know that’s an oversimplification. Not everybody does that. But my job is to figure out first off, once again, what’s the best thing to purchase within that market. But then how do you hit the revenue target with that home? Like, what does it need to do? And that really comes down to design amenities, photos, those sort of things.

Speaker E [00:24:26]:
Right.

John Bianchi [00:24:26]:
Which to me are.

Jonathan [00:24:27]:
It’s.

John Bianchi [00:24:28]:
They’re not numbers, but they’re. They’re data. Right. It’s a different kind of data, and it’s as important as everything else. And so the reason I’m Bringing it up is because I actually like tried to find a superior listing in Gulf Shores. Like an amazing, beautiful, well put together listing that wasn’t a home along the beach, right. And the interesting thing was that there literally was none. I found one that was like on the edge of what I would consider to be really good.

John Bianchi [00:24:55]:
Now mind you, I didn’t go over the, through every single last listing. I just, I tend to just stay right to those like high performing ones because I’m very curious. But when I’m talking about like beautiful, perfect listing, I mean the design is very strategically well thought out design. There’s, they’ve gone above and beyond with their amenities and the sort of features that they put together and they, they’ve like put a lot of effort to create a great experience for this. And the reason I’m bringing this up is because if you go to like some of the top tier markets like Scottsdale and Gatlinburg, like these listings nowadays are over the top and they’re really providing an amazing design experience and everything and that’s allowing them to make more money, right. And, and so I always try to find one of those within a market because then that tells me what amenities and design are actually working within that area. And I couldn’t find that many that, that actually did it. There was one that was good, that had a really great design and it actually was at the top.

John Bianchi [00:25:45]:
And what I do want to say, not 100% certain if this piece of data was accurate, but the second highest comp in my data set for the most money being made in Gulf Shores was actually Bill Faith’s home.

Avery Carl [00:25:58]:
I was just about to say, I’m sure it’s one of his.

John Bianchi [00:26:00]:
Yeah, I saw it. I was like, I was like, I recognize this listing, but the issue was the data. The way it looked there was. I know he does a lot of direct booking, so I don’t know how accurate it 100 is, but he was, he was one of the only people to have like a fire pit. He actually had photos of the, his lounge chairs and his pool set up. He had like all these additional amenities and features and designs that I was like, okay, not a lot of people have these. And I know this because I’m looking at all the top properties, right? A lot of people are just relying on the fact that it’s on a beach. But it’s like if you can just take it that five steps further, you’re going to be able to beat your competition in that area.

John Bianchi [00:26:31]:
So with that being said, you’re talking about revenue opportunity. Was that the word you used, Tim?

Jonathan [00:26:37]:
Yes, potential.

John Bianchi [00:26:37]:
Potential revenue potential. Yeah.

Tim Grillot [00:26:40]:
So I sounds like there’s a lot of opportunity though, from bouncing into your opportunity queries. That sounds ripe for doing some work.

John Bianchi [00:26:47]:
Yeah, that’s what I mean. Right. So like I was, I was intrigued by that and I was like, I thought Gulf Shores would have some of these like, superior listings and that those would be the ones you’d see at the top, but they really didn’t. Everyone’s just relying on the beach and the walk, how close it is. But I, I truly believe that if you added a lot more to it, you would, you would see a difference there.

Avery Carl [00:27:03]:
Yeah. So you’re, you’re saying, because I have like three points that I want to ask slash make on this, you’re saying that in this blue chip market that a lot of people love to talk about how saturated it is, you’re saying there’s a ton of opportunity because not everything, not everybody’s really like going the extra mile.

John Bianchi [00:27:21]:
Yes. So two things on that. One, remind me to talk about saturation because I did a whole report on it. And two, yeah, 100.

Speaker E [00:27:29]:
I.

John Bianchi [00:27:30]:
If I’m being honest, I’ll call it out. I think that there’s a lot of like, okay listings. I don’t think that they’re great listings by any means. Like go, like honestly, go look at Joshua Tree, go look at Scottsdale, go look at Gatlinburg and go look at the top of the top listings and what they’re doing. You’re going to see a difference in comparison to what you’re seeing at Gulf Shores. You really are.

Tim Grillot [00:27:46]:
So I think there’s potential that’s exciting to me. Like that’s, that’s like, it makes, that makes me want to go buy another one and set it up.

John Bianchi [00:27:52]:
Yeah. Make sure it’s a two bedroom condo. I don’t if you are going to do a. But that’s so actually somebody’s probably going to hear me say that and be like, well, how do you out amenity a condo? And it’s just the design. So if you, if you do get, if you do get a condo, it’s the design and it’s the photos and it’s like throwing our arcade games in the living room area or something. Or shuffleboard behind the couch. Right. Just.

John Bianchi [00:28:15]:
Or, or adding like turf to the patio and hanging lights and more comfortable seating. And that’s like. So that’s how you win with a condo, right? Is you just go that extra level. It’s but it’s really all the design that matters. And, and I wish I could share listings and show you guys because, like, there is. So there’s one listing that did it properly, in my opinion. And you can see they’re right at the top with everybody else. So.

Avery Carl [00:28:36]:
But anyways, we can link that in the show notes too, if you want. If you want to send it to us.

John Bianchi [00:28:41]:
For sure.

Avery Carl [00:28:41]:
Okay, so, yeah, let’s. Now I have two more points I want to make, and I’m saying them out loud so nobody lets me forget them. I want to hear about the saturation. And then I know a lot of people weren’t. Didn’t have a lot of great amenities for you to maybe pull a full report on that. But what are the top amenities? So you choose which one you want to do first.

John Bianchi [00:28:59]:
Okay, well, I’m going to stick on amenities and then we’ll jump over because.

Avery Carl [00:29:01]:
Okay.

John Bianchi [00:29:02]:
You know, we’ve been going on. So I honestly, first off, I kind of mentioned it already, but I would say design is, is number one. I think that design and photos, I think are the two things that are probably missed the most, especially in these condos. For whatever reason, people get lazy when the peach is right there. You know what I mean? They’re like, well, everyone’s just gonna be hanging out in the beach. You’re like, yeah, they are, but they’re still gonna pay more for your home if it’s a sexier design, if it’s a cooler design, if it’s properly designed and flows all the way through. So design is gonna be like the first thing and just because there’s not a lot of land. But then the other thing is.

John Bianchi [00:29:33]:
Well, I already mentioned all the condos, so I’m going to focus on single family homes. So if you get a single family home, most of these are on stilts and you’ve got this bunch of space underneath and it’s so underutilized, it’s not even funny. Like, they have. They’ll have like a, a picnic table down there and they’ll take a couple photos, maybe some hanging lights. That’s it. But like, if you have that entire area down there created into a little oasis where people can hang out and have a good time and, you know, on a rainy day, be able to spend the day down there, still be outside and still get to enjoy things. Have some sort of like, Bill Faith’s got a. One of those fire pits that’s like a smokeless fire pit.

Speaker E [00:30:05]:
Right.

John Bianchi [00:30:06]:
Add that down there. I think there should Be a fire pit in almost every single Airbnb across the board. Because it’s just something that a lot of people love to do. And so, you know, if you have the space for it, add a fire pit. If you have the space for it, add a, you know, lounge area with hanging lights above it and, and take really beautiful photos of it. Add some color to it as well as many hanging lights as you can. You can think like, if you buy them, just kind of have the thought in your head, like, I think I have too many hanging lights. That’s.

John Bianchi [00:30:31]:
That would be the right number of hang light. Have, you know, and, and like, I don’t know. There’s. Those are the main things. The way that I kind of think about it is like, you want to get the main things and the main things are the fire pit, the lounge area, the picnic table, the hanging lights. Those are the stuff where it’s going to allow for people to socialize and have a good time. Now, if you want to go above and beyond, that’s where you’re going to get into like the putting green or the potentially all hot tub, which I don’t know if it’s. I don’t know what the temperature is like there, but maybe a hot tub can help extend your.

John Bianchi [00:30:58]:
Your season a little bit.

Speaker E [00:31:00]:
Right.

John Bianchi [00:31:00]:
Because maybe it starts to get cold and in October, November, and you’re like, well, people would enjoy the hot tub a little bit. So it extends your potential to get booked in those time frames. And, and that’s how to be thinking about it. So those are the. Without continually going in to more and more and more amenities. I think if people just focus on those core ones I just mentioned, it’ll make a difference to their revenue.

Tim Grillot [00:31:18]:
I don’t want to dip it down or anything here. I just want to make a note, if you are a beachfront condo or beachfront anything, watch what lighting you’re using. You can’t just put any color lights on. They are very, very strict about. Because there’s some regulations with the sea turtles and Stu can go wild. But there’s a certain color light you got to use. So do your research on that.

Avery Carl [00:31:37]:
Yeah. Over here it’s got to be red or orange.

Tim Grillot [00:31:40]:
Same. Same. That’s just if you’re beachfront, you know, if you’re anything facing the. The sand is there. It’s highly regulated on lights.

Avery Carl [00:31:46]:
Yeah. And. And bury your holes. If you dig holes in the. On the beach we had over here on 30A, we had recently, like two weeks ago, some kids dug A big hole. And then the next day a lady was jogging. They didn’t obviously didn’t fill it back in. And there was like a 200 pound sea turtle upside down in the hole and she was still alive.

Avery Carl [00:32:06]:
They were able to get her out, but like it took several people to dig this turtle out and it’s just not cool. So anyway, that’s beside the point.

John Bianchi [00:32:16]:
But I’m glad they got it out alive. That’s nice.

Avery Carl [00:32:19]:
Yeah.

John Bianchi [00:32:20]:
Yeah.

Tim Grillot [00:32:20]:
I used to want a thousand people to go out and run and put the bright white lights on their decks of their condos and get.

John Bianchi [00:32:26]:
Yeah, See this is. I always mention this where it’s like all the suggestions I always give. I don’t have local knowledge, you know, so I’m just kind of like, think of it from a high level. And that’s why I love that, you know, you guys are on this call because you’re like, hey, remember this though? You know what I mean? You kind of shoot down and bring it into reality of what’s possible within those areas.

Avery Carl [00:32:42]:
Yes. Data, enemy method and local agent knowledge are what you’ve the recipe for being able to get a good property and not make any mistakes. And you can still make mistakes, but minimize mistakes.

John Bianchi [00:32:55]:
Well said. Yeah, exactly. Do you want to jump into saturation?

Avery Carl [00:32:59]:
Yeah, let’s hear about this.

John Bianchi [00:33:00]:
This. Sure. So I found this interesting. This is just Gulf Shores, not Orange beach, but I’m sure it’s fairly similar. First off, for people who are like, how do you figure out if the market’s saturated or not? It’s a supply and demand thing.

Speaker E [00:33:12]:
Right.

John Bianchi [00:33:13]:
And so you can get the revenue and the supply numbers of a market. And so you can figure out how much revenue was made year over year. So is it increasing or decreasing? And you can also figure out how much much supply was brought on year over year. So how many new Airbnb listings. And as an example, if the revenue, if the supply increases by 10%, you want the revenue to also increase by 10%, because that. What’s happening there is that the total market is still making the exact same amount of money year over year.

Speaker E [00:33:45]:
Okay.

John Bianchi [00:33:45]:
It’s not a perfect science, but it’s close. And so what you want is always for the revenue to either be doing as well as the supply or more. Okay. And so as an example in from. How do I explain this? The revenue has been outpacing supply for the past five quarters straight. Okay. So what that means is like Q1 of 2023 compared to Q1 of 2022. The revenue was 20% higher than the revenue than the supply.

John Bianchi [00:34:14]:
Revenue was 20% higher than the supply, which means that each individual listing was roughly making about 20% more year over year between that time frame.

Speaker E [00:34:20]:
Right.

John Bianchi [00:34:21]:
If we go to Q4 of 2022 to 2021, it’s up 39%. The quarter before that, it’s 18. The quarter before that, it’s 8%. The quarter before that was 23%. So it’s been. In other words, revenue has just consistently been outpacing the new supply that’s going into the Gulf Shores area, which means it’s not an oversaturated market at all by any means. So if you’re in that market and you’re not doing well, it’s you, not the market. Just letting you know.

Avery Carl [00:34:48]:
Hard truth.

John Bianchi [00:34:49]:
Yeah, sorry. Sorry to tell you.

Avery Carl [00:34:51]:
Well, I mean, you did say that there’s a lot of opportunity. So if you’ve already got a property, I mean, you’ve already. You’re already halfway there. All you have to do is improve your amenities, improve your listing, and that’s not too terribly difficult to do. So I think that this is a really important conversation because. So a lot of people talk about Gulf Shores. There’s a lot of people out there that, you know, obviously, bill myself, that talk about Gulf Shores and a lot of people investing a lot of. I thought there were a lot of sophisticated operators.

Avery Carl [00:35:24]:
So this is an area that, since it’s being talked about a lot, a lot of people want to just say, oh, it’s saturated. Because they hear that word all the time. They hear Gulf Shores all the time. And that’s really interesting to hear that it isn’t. So my hypothesis, or it’s not really a hypothesis, I guess it is that just because a market has a lot of listings does not mean that it’s saturated. Is true.

John Bianchi [00:35:45]:
Of course not. Of course not. That’s a. That’s a. I mean, New York, as an example, has like a hundred thousand hotel rooms. And when you think that, when you hear that, you’re like, yeah, but it’s New York. I’m like, yeah, but it’s relative, right? So New York, of course, will have millions of visitors every year. So having a hundred thousand hotel rooms isn’t that insane.

John Bianchi [00:36:04]:
But then if you just sort of. Of it’s the ratio between number of people traveling and the number of spaces to sleep.

Speaker E [00:36:10]:
Right?

John Bianchi [00:36:11]:
And so as an example, Gulf Shores has enough space for people to sleep, right? Like in. In. In comparison to the number of people who are actually traveling there. And actually the number of listings has decreased as of Q1 of 2023. So it used to be, its peak was Q2 of 2022 at 7,600 listings and now it’s down to 6,850 listings.

Avery Carl [00:36:34]:
That’s a lot of listings that went down.

John Bianchi [00:36:36]:
It is, but, but at the same time the revenue is. And that actually could be. So the lowest time frame where revenue, the outpacing supply, like the smallest it was, was actually during the peak listings which would been 7,600. And it only the revenue difference is only 8%.

Speaker E [00:36:52]:
Right.

John Bianchi [00:36:52]:
So that would have been like fairly close. But now it’s, now it’s down to 6,800 listings and the revenue is outpacing by 20% year over year.

Avery Carl [00:37:00]:
Wow.

Tim Grillot [00:37:01]:
Yeah, this is fascinating.

Avery Carl [00:37:02]:
Yeah, it really is.

Tim Grillot [00:37:04]:
You know, I’m kind of a hillbilly and I just look at license plates and stuff and, and having actually something to actually back it up. Sounds fantastic. You know, I mean, you know, when I go down there, there’s license plates from everywhere and lots of them, you know, and that’s, that’s kind of, you know, the traffic gauge. And John Jonathan knows all about that. You know, if you can’t get a mile in an hour, then that means that there’s a lot of people there.

Jonathan [00:37:24]:
So.

Tim Grillot [00:37:25]:
Yeah, my wife, my wife’s known for.

Jonathan [00:37:27]:
Cursing out all the tourists. And my babe, we need the tourists. She sees those license plates, she’s like, all these snowbirds, baby, they’re bringing some money.

Avery Carl [00:37:38]:
Well, awesome. So John, is there any, anything else, any other points that you want to make before we go? This has been really fascinating. I, I kind of thought I knew what was going on. This market. I really actually don’t. So that was really enlightening data. It’s always fascinating to listen to you present the data that you found. I always learn something new.

John Bianchi [00:37:57]:
I appreciate that. Honestly, I don’t really have anything else that I wanted to go over. Those are, are the main things that I wanted to touch on. You know, anyways, those are the main things I want to touch on. I think it’s a, I think there’s a market with definitely potential. It’s probably not going to be your best cash flowing market out of every market that’s possible. But you know, it could be a good equity play for sure and, and a good place to have a vacation home as well. So anyways, that’s my take.

Avery Carl [00:38:22]:
All right, awesome. Well guys, if you want to learn more about the Gulf Shores market, you can always join one of our Thursday Q A calls. You can join those at str, our Facebook group. It’s the same title as my book. It’s called Short Term Rental, Long Term Wealth. If you want to work with Jonathan in Almost Said Smokey. Sorry, I’ve been dealing with that all morning. If you want to work with Jonathan and Gulf Shores, email us at agents at the short term shop.com or you can get them directly at Jonathan at the short term shop.com and John, where can people find you on the Internet?

John Bianchi [00:38:57]:
My handle is at the Airbnb Data Guide. I strongly recommend check me out on YouTube. I’ve got three free courses there and then you’ll find me everywhere else from there. So, yeah.

Avery Carl [00:39:07]:
All right. Well, thank you again so much for coming on. It’s always a very educational experience. Appreciate it.

John Bianchi [00:39:12]:
Thanks for having me.

Avery Carl [00:39:13]:
Thanks y’ all.