How Much Does It Cost to Run a Short Term Rental in Gulf Shores?
If you’re thinking about buying a short term rental in Gulf Shores, understanding the cost side of the equation is just as important as estimating potential income. The market continues to thrive in 2025, but success hinges on knowing what to expect when it comes to real-world expenses. Whether you’re eyeing a beachfront condo or a home in Fort Morgan, this guide will walk you through the typical and often-overlooked costs associated with running a short term rental in Gulf Shores.
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📞 Call/Text: 800-898-1498
🌐 Browse properties: https://bit.ly/stsgulfshores
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Operating Costs of a Gulf Shores Vacation Rental
Every property is different, but most short term rental owners in Gulf Shores will encounter the following recurring expenses:
1. Utilities
Expect to pay for electricity, water, sewer, trash, and internet. Gulf Shores’ hot summers also mean higher cooling bills during peak season.
2. Cleaning & Turnover
Cleaning fees are often passed to guests, but you’ll still want to account for deep cleans, linen replacements, and restocking essentials.
3. Property Insurance
Vacation rental insurance is different from standard homeowners insurance. Rates may vary based on location, flood zone, and property type.
4. Maintenance & Repairs
Regular upkeep (HVAC, appliances, landscaping) and emergency fixes should be budgeted. Beach homes may also require added upkeep due to salt and sand exposure.
5. Pest Control & Lawn Care
These are essential for guest satisfaction, especially in a coastal climate like Gulf Shores.
6. HOA Fees (if applicable)
Many condos and gated communities include monthly dues that cover shared amenities and exterior maintenance.
7. Platform & Management Fees
If you self-manage, platforms like Airbnb and VRBO deduct a percentage of your earnings. If you use a property manager, expect to pay a higher monthly cut.
Hidden or Unexpected Costs to Watch For
Short term rental investors in Gulf Shores should also plan for:
Seasonal prep (hurricane shutters, storm cleanup)
Guest damage (even with deposits)
Permit or license renewal
Amenity upgrades (grills, beach gear, hot tubs)
Deep cleaning between busy seasons
These aren’t monthly, but they do impact your annual budget.
How to Estimate Costs (Without Guessing)
At The Short Term Shop, we don’t run numbers for clients—but we do provide access to Airdna data and coach you on how to analyze comps, estimate expenses, and build a sustainable STR business. You’ll learn how to:
Compare properties with different operating costs
Factor in fees by property type (condo vs single-family)
Budget for occupancy dips or off-season lulls
With this data in hand, you’ll avoid surprise costs and buy with clarity.
Is Gulf Shores Still a Strong Market in 2025?
Yes. Gulf Shores offers a rare blend of affordability, year-round tourism, and favorable regulations. While costs do add up, properties here tend to generate strong returns due to:
Consistent seasonal demand
STR-friendly zoning in areas like Fort Morgan
Repeat visitors and family-driven travel patterns
Just make sure your expense estimates are realistic—and that you’re fully prepared before closing on your first investment.
Ready to Buy a Short Term Rental in Gulf Shores?
We specialize in helping investors find STR-zoned properties in Gulf Shores, Fort Morgan, and Orange Beach. We’ll connect you to listings, tools, and a team who knows exactly what to expect when budgeting for your first (or next) investment.
📧 Email: agents@theshorttermshop.com
📞 Call/Text: 800-898-1498
🌐 Browse properties: https://bit.ly/stsgulfshores
🎓 Want Support from Experts (at Any Budget)?
Check out STS Plus — our coaching and investor education community. With tiered pricing and real-time help from pros, it’s the most affordable mentorship program available for short term rental investors.
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@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. 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, 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@strquestions.com 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.
Tim Grillot [00:01:50]:
Foreign.
Avery Carl [00:01:56]:
Hey y’ all. Welcome back to another episode of the short term show special episode series on the Gulf Shores market. We have a few familiar faces to introduce to. We’re, we’re talking about expenses today. So on the previous episode we talked about income and numbers. Today we’re going to talk about the other piece of that Puzzle the expenses. So first we will introduce Bill Faith. You guys all know who that is, but Bill, go ahead and introduce your.
Bill Faeth [00:02:22]:
Hi, I’m Bill.
Avery Carl [00:02:23]:
I’m just kidding.
Bill Faeth [00:02:24]:
I’m Bill. I’ve been invested in the Gulf Shores market. Really Started in Fort Morgan in 2015. Made some migration of my assets down to the west beach area when the airport was announced quite a few years ago. And I’ve done some new construction. My number one property in my portfolio is located in Gulf Shores. So I own one in Fort Morgan, one in Gulf Shores today, and then I actually co host eight additional properties in the market.
Avery Carl [00:02:51]:
All right, Tim, you want to introduce yourself?
Tim Grillot [00:02:53]:
Yeah, my name is Tim Grillo. I own in Gulf Shores and in the Smokies. So in Gulf Shores we have two condos that are on the west beach end of town, so. All right.
Avery Carl [00:03:03]:
Thanks Tim. Ethan.
Bill Faeth [00:03:04]:
Yep.
Ethan McCarty [00:03:04]:
Ethan McCarty have a duplex in Fort Morgan. Been down there a couple years.
Avery Carl [00:03:09]:
Thanks, Ethan. And Jonathan.
Jonathan Lazzarino [00:03:12]:
Hey everybody. Jonathan with a short term shop in Gulf Shores, in Orange beach and Fort Morgan. And I own an RV park and some short term rentals in the Fort Morgan area.
Avery Carl [00:03:21]:
Lots of Fort Morganers. All right. Yeah, it is quieter down there. I like, I like the quiet of Fort Morgan compared to right in the middle of Gulf Shores. But if you’d asked me when I was 21, I might have had a different answer. So let’s talk about expenses. So you got a few, just basic generic expenses that we’ll go through first. Like you know, your electric, your water bill, things like that.
Avery Carl [00:03:46]:
So what do you guys see for that? We don’t need specific numbers. We just need to know if anything is wildly out of line with, you know, a general expectation.
Tim Grillot [00:03:53]:
No, I think, think, I think really I’ve seen it’s pretty typical of around the country for your, your utilities expenses. Obviously insurance is one that’s going to be, you know, maybe jump the gun there, but insurance is going to be a little more than just, you know, middle America because you are on a, on a beach market. So. But as far as general utilities, I’ve seen is pretty, pretty normal.
Bill Faeth [00:04:12]:
Agreed. Tim, you brought up the, the 800 pound gorilla.
Tim Grillot [00:04:16]:
Yeah. Right out of the, right out of the gate. Yeah. Avery loves it when I do that.
Bill Faeth [00:04:20]:
Insurance and taxes.
Tim Grillot [00:04:22]:
Yeah, let’s talk about that, right?
Avery Carl [00:04:23]:
Yeah, let’s try. Let’s dive right into it. So I mean if everything else is, you know, pretty normal. Well, one thing I want to ask about the very normal expenses before we get into the abnormal expenses. Is it typical to have gas in this market or is everything electric?
Jonathan Lazzarino [00:04:37]:
It depends on where you are. A lot of places in Fort Morgan won’t have gas is even an option. So a lot of for Morgan properties won’t have gas in West Beach. You do see some gas in Orange Beach. Another thing to point out is with condos it is way different because most of the time the HOA dues are going to cover most of your utilities except for electricity. I’ve never seen them cover electricity and a lot of times they’ll even cover your cover your cable and Internet. So you do have to consider that in your numbers.
Tim Grillot [00:05:05]:
Nailed that. A lot of people get freaked out over. Over condo dues and that’s. I have two of them and that’s exactly the way it is. Everything is covered in my HOA dues except for electric. And you know, ours are just little one bedrooms and electric. Pretty cheap, to be honest. In the peak of summer it’s like 200 bucks and in the winter it’s like 80 bucks, you know, so it’s.
Tim Grillot [00:05:25]:
And then like I said, every. Everything’s there. Sewer, water, electric cable and Internet are all included in the deuce. So.
Bill Faeth [00:05:31]:
So, Avery, I have a property sounds pretty close to where their condos are in the west beach part of Gulf Shores. And it was new construction that I built in early 2021, 2020, late 2020 into early 2021. And I think you can turn gas into an asset in that market. I’ve done that everybody. The majority of people seem to have electric heaters in their pools. I did put in a pool and I spent about $4,000 to pull the gas line down West beach almost 2,000ft to my property, so I could put in a gas heater. The only way it benefits is if you market that as an amenity, though. So in January, February, you know, it’s typically breezy, windy, that cools down the water temperature.
Bill Faeth [00:06:17]:
When it’s in the 50s and 60s, it’s impossible for these decent sized pools with electric heaters to get up to 85 to 90 degrees. They kind of top out around 77 to 82, depending on pool size. So I spent the extra money for a gas heater. I’ve leveraged that and that has been a huge benefactor for me for shoulder season and winter revenue and sustaining, you know, higher ADRs, just FYI. But the end, I charge $50 a day for heating with my gas heater. Maybe cost me about 17 to $18 per day to keep it heated. So it’s actually a profit Center.
Avery Carl [00:06:54]:
Totally, totally agree with that. We did that on our place down the road in Destin, and it made a huge difference. And a lot of people are like, oh man, the beach. You don’t need a heated pool. You do. This is not South Florida.
Tim Grillot [00:07:05]:
You absolutely do. And exactly what Bill said, your winter guest almost, almost expect it. I mean, if you say heated pool, it cannot be 75 degrees. It’s got to be warm.
Bill Faeth [00:07:15]:
And you guys are in condos. That’s a problem with cottages and condos. The ones that don’t have heated pools, it’s tougher to book, you know, during. So I look at that added expense. I, I, my, my first investment into west beach actually was on the east beach side and it was into East Point cottages when Shaul, if you guys know who Shaul is down there, who owns everything, right, when he sold those. And the fundamental problem was, is we had 12 units. They were all great, everything was fantastic. But literally, the new HOA that was homeowner owned would not approve the 5,000 bucks to put in a gas heater.
Bill Faeth [00:07:51]:
There was no pool heater. So really the pool becomes almost insignificant as a selling point. So those are some expenses that I think people should look at when they’re acquiring a property, whether it’s single family home, whether it’s a cottage. Cottages are the big thing in Gulf Shores right now. Right. They’re being overdeveloped, in my opinion. But those added expenses can give you a marketing separator and increase your adr.
Avery Carl [00:08:16]:
Absolutely. So that’s how to turn gas into an asset, guys, if you have it. So now we can, now we can get into the 800 pound gorilla if you guys want to. So some of the things that are more expensive in this market. Let’s talk about insurance because that’s the big one along the Gulf, Gulf coast in general right now, where at the end of July 2023, if you guys are listening, sometime off in the future, maybe it won’t be an issue anymore, but it’s something to think about right now if you’re buying in this market. So who wants to start talking about insurance?
Bill Faeth [00:08:48]:
I don’t want to talk about it. It’s too damn expensive.
Tim Grillot [00:08:51]:
I’ll say. You know, it does vary and, you know, we’re sitting here like you said, in 2023, and we’re a couple of years post, post Hurricane Sally, which was a big one for us, and there was a lot of damage done and I was the recipient of some of that. But it, you know, you just have to you just have to factor it in and pay attention to it and be, do your diligence up front. Again, I’m going to talk about condos a little bit because that’s what I have. But if you’re buying a condo, understand how that’s handled because there’s, there’s two insurances. You know, really you have your own personal insurance that is on, you know, your cube of whatever the condo is in that building. But then there’s an insurance plan that’s the master plan on the entire building and the HOA will manage that. And when you’re going into buying a condo, you need to understand how they’re handling insurance increases because they do happen.
Tim Grillot [00:09:37]:
Usually they do one of two things. They’ll either just roll it into the dues and the dues will be what they are, and that includes the master plan insurance, or they’ll create an assessment for, for the, for the insurance. And I hate to say it, but sometimes the assessment kind of hides the cost a little bit when you’re, when you’re buying. And a lot of people don’t catch that. So ours actually has made the election to roll it into the dues. Some, some HOAs don’t like to do that because it makes the dues look higher versus having it separate and being an assessment for the increase. But you can start to get assessment tacked on, tacked on top of assessment. So just understand when you’re buying how the insurance is handled and if there are any assessments and how far out they go and what they’re covering and things like that.
Tim Grillot [00:10:21]:
So it’s really, it’s just understanding it, it is what it is. You can’t, you can’t really change it a whole lot. I mean, you can shop around for insurance but you want to make sure you’re covered correctly. So it’s a, it’s a double edged sword there.
Bill Faeth [00:10:30]:
And the other thing for new buyers is to, you know, get copies of the annual meeting minutes and ask questions of how the HOA is funding that insurance policy. Are they paying cash for that or are they financing? I’m sure you’ve heard the horror stories of some ho ways and property management companies that have financed gotten upside down, then the new buyers have to come in and have another assessment to be able to buy out the previous policy or they’re rolling that in to the new policy which you’re going to pay for in the future.
Avery Carl [00:11:02]:
Do you think that buying a condo is an opportunity to maybe save some money on insurance? Is insurance less because you’re only insuring what’s inside the condo, whereas your. The exterior is covered in your condo association. Or do you think it all kind of evens out because you are paying HOA dues plus your insurance on the inside?
Tim Grillot [00:11:23]:
I personally feel like it drastically depends on the HOA and how well the HOA is managed. A well managed HOA can take not only some of the cost, you know, it can be really, it can be a little bit beneficial on the cost. But more so than that in the, in the event of an event, a well managed HOA helps spread the burden of taking care of the repairs a bit. Our HOA was fantastic during Sally, I got to say, and we were one of the first buildings back up and live. But it took a lot of teamwork and effort to get that building back up and going and repaired and everything.
Bill Faeth [00:11:53]:
So all I know that my biggest expense at the beach on an annual basis, Avery, is insurance in the single family home space.
Avery Carl [00:12:01]:
Yep.
Bill Faeth [00:12:02]:
My largest property there in west beach, it’s a six, four. I’ve got a pool, it’s tier two. The lots are open in front of me, so it’s almost beach front. I’m. My renewal is in two months. I’m already working on it. I was at 12,800 over the last year. I’m looking at somewhere between 20, really 19 to 23 thousand dollars.
Bill Faeth [00:12:25]:
That’s cash as an expense. Right. And so those are things that come with doing single family homes. We don’t have assessments and stuff like that. But I think a lot of people look at the entire panhandle and I think it’s being impacted not only still the, the aftermath by Sally, but also what’s happening, how much harder it’s becoming to get insurance in Florida is trickling over into Alabama. And I think that needs to be something that’s factored into your Performa when you’re looking to do an investment or new construction anywhere. Basically from St. Joe all the way to Dauphin island, we actually just had.
Tim Grillot [00:12:58]:
All minor, not opposite, but we. Our insurance just got switched this year as well. And it’s just coming up for renewal here in about two months. And ours actually mildly went down. So just this is a complete other side of the spectrum of what Bill’s property. It couldn’t be more opposite. I have there one bedroom, one bath condos or one bedroom, one and a half bath condos. And our insurance on our, I call it the box insurance, there’s a better name for it.
Tim Grillot [00:13:22]:
But our insurance on our unit just went from 20$500 a year down to like 22 or 20$300 a year is a real mild decrease. But it was a decrease and our building as a whole went up a little bit and it ended up, you know, the difference in our HOA it went from like $355 a month I think like right at 400, 400 or 408 or something is like $50 a month that went up on the building.
Bill Faeth [00:13:46]:
So.
Avery Carl [00:13:47]:
So do you think as a new buyer who hasn’t bought anything yet, what are some ways, maybe some certain types of properties they can buy in terms of age or gold fortified construction? It’s called gold fortified, right? Jonathan? I, I know, it’s okay. I keep wanting to call it like solid gold or something. So what are some ways that you can choose a property that might be a little bit less on that insurance without necessarily sacrificing the other things that might be great about it like location or amenities, things like that.
Jonathan Lazzarino [00:14:16]:
Well from what, and these are all great points from what I’m seeing now, it really condos can be some of the best savings for insurance. If like, like we were just discussing if the HOA’s run well, if they haven’t filed some major claims, if the age of certain components or newer the. If you’re wanting the most clear answer without having to do a lot of due diligence, which you do really have to with condos, then the, the cottage style new gold fortified, new construction are probably going to be your lowest insurance options. For a lot of clients that have closed recently. You’re seeing under, I mean you know, as of right now under 4, 500 for your flood and, and your homeowner’s insurance. And these are not in high, you know, they’re not in COBRA zones or nothing like that, which is a whole different thing to talk about. But, but those are going to be probably your lowest insurance. I’m not saying they’re the highest grossing properties or anything, but just insurance.
Jonathan Lazzarino [00:15:11]:
The gold fortified cottages are probably your best bet for lowest insurance.
Bill Faeth [00:15:16]:
So no question. I think if you go down the checklist you mentioned it. John Cobra non Cobra know your flood zones and that’s something that your agents like you guys by having somebody like STS agents that specialize in short term rentals critical from a knowledge standpoint. Cobra, non Cobra Tom Gold fortified age of the home. I mean trying to get like a beachfront that was built in the 60s or 70s insured or even tier two out in Fort Morgan these days it’s probably going to Be double, maybe triple what that same house would be in west beach if it’s gold fortified impact windows, non impact windows. All of these things that the first time buyer. That’s if you’re not aware of all of this, this is where your agent should be educating you. And most don’t, most don’t understand you know all of those things and get your quotes.
Bill Faeth [00:16:02]:
So there’s this whole thing that I believe in is contract to close. You know, your insurance should be part of your due diligence, not as a contingency. But that should be like one of the first things that I would be looking at once I go under contract.
Avery Carl [00:16:15]:
Yeah, yeah.
Tim Grillot [00:16:16]:
And exactly what they’re talking about on single family carries over into condos. I mean understand like what your building has for doors and windows. That’s. That is a massive thing. You know again, ours when we, when we did the rebuild we all, you know, voted to. We really, we spent extra money putting in way better doors and windows and stuff on the building to you know, to help with all that.
Avery Carl [00:16:35]:
Yeah. And. Oh, go ahead Jonathan.
Jonathan Lazzarino [00:16:37]:
Oh, just to say that’s a really good point that Bill made. It is during your 10 business days of due diligence. Of course this is a negotiation but still standard in the contract is a 10 business days. The inspection is just one of many things. But the insurance quotes, even though you don’t have to have them during that time, that’s one of the first things I always tell my clients to get is multiple insurance quotes to see what they’re really up against. Because you, you may be projecting something but it could be completely different than what you’re thinking.
Avery Carl [00:17:06]:
And if you guys happen to want to buy something on Dauphin Island, I don’t necessarily really recommend that. But if you do because things are cheaper over there. Reason:1 million not to buy one of those houses that you can fish off the. The front deck that have the waves in the front or the back deck. Yeah, I almost did insurance on that. Like there is no way you’re going to get insurance on that. Not that you shouldn’t be buying those anyway because they will float off into the ocean at some point, which is why you can’t get insurance. But anyway, in case anyone was wondering.
Ethan McCarty [00:17:42]:
One thing on insurance that you know, we talked about insurance and maybe in a negative light, but make sure you are appropriately insured. You know, just because it’s the cheapest insurance doesn’t mean it’s the right insurance. You know, you need to have a good insurance agent to, to make sure. You’re properly insured for whatever circumstances might arise.
Bill Faeth [00:18:00]:
Yeah, that kind of just jogs my memory. And something that, you know, we had. I had a mastermind member in Gatlinburg two years ago. I think it was Avery when the fires hit and he lost a property. One of the smartest guys, former executive at Bridgestone here in Nashville. And he wasn’t. He’d had the house or the cabin for three years, and he wasn’t insured enough on the dwelling cost for rebuilding. And so he ended up having about $190,000 gap.
Bill Faeth [00:18:29]:
So specifically, when you are. When you’ve gone through one or two renewals, especially now as building costs have skyrocketed, and if your insurance agency is only giving you $225 a foot to rebuild, but you talk to the local builders and it’s 300, sometimes 400, even 500, depending on market, you need to reshop that and try to get that up. Because if you go through a Sally, you go through a fire, you go through something like that, a lot of you probably aren’t going to have enough cash to be able to gap a $200,000 disparity on dwelling coverage.
Avery Carl [00:19:00]:
Yep. Especially, you know, in the. The really high appreciation that we’ve seen in the past few years. You definitely want to make sure of that. During those last fires, I had the thought like, oh, insurance will cover this, because it got pretty close to one of ours. And then I thought, oh, wait a minute, we haven’t that. Luckily it was like the smallest, cheapest one we had and nothing happened to it. But I remember thinking, oh, crap, great.
Tim Grillot [00:19:25]:
There was a rush of that in the Smokies when those fires hit, I would live. I live right across the street from where they were. And we sat there and watched cabins burn every day. It was horrible.
Bill Faeth [00:19:34]:
And.
Tim Grillot [00:19:34]:
But there was a ton of exactly what Bill was talking about that happened. And it is. It’s very unfortunate when people see people go through that.
Bill Faeth [00:19:41]:
So. And you think about it, that’s that one, your insurance rates go up. So that’s going to be an added expense. But that’s why companies like Proper, it’s getting harder and harder for them to write into those markets.
Avery Carl [00:19:52]:
Yeah.
Tim Grillot [00:19:52]:
We actually had a closing schedule that was going on during the fire, and we literally got to the table and insurance agent called and said, we can’t do this today because they had actually stopped insuring until the fires went out.
Bill Faeth [00:20:03]:
So. Wow.
Avery Carl [00:20:04]:
We had a listing that was under contract. It was going to close in like a week. That had like an $800,000 gap burned down.
Tim Grillot [00:20:15]:
Yeah, I had a client that was a buyer that, that lost one. We were who’s like a week from closing and it burnt down. So it was horrible.
Avery Carl [00:20:22]:
That was, that was painful. Anyway, all right, other stuff, other stuff related to this market. So let’s talk about, we’ve talked about HOA fees. So when we’re hiring a cleaner here, what it, what are you guys seeing for the cost of cleaners per turn and what they cover? So do they. Are you having to provide linens and towels? Are they doing that? Or are you providing the consum and paper products or do they do that? Let’s go through that whole thing.
Bill Faeth [00:20:47]:
I’ll start. I guess I’m probably a little bit different than most, but I provide everything except for cleaning products. I provide consumables, I provide sheets, I provide towels, everything. Because I want control over it. Because I’m in that super property space that I think the norm is, you know, having the cleaners provide all of those things. But I’m just kind of a control freak and I want to control the quality and, you know, the thread counts and, you know, all that stuff. On my own, I’m paying about 75 to 75 bucks to 100 bucks, you know, per room as it scales up, you know, so a three bedroom, I typically pay about 300 bucks. As I get up to six or seven bedrooms, it does come down because of the scales of economy and that’s when it drops down to like that 70, 75 range.
Bill Faeth [00:21:36]:
So on the high end, I have a seven bedroom that I’m paying $600 a clean for. And on the low end I have a two bedroom that I’m paying $200 a clean for.
Ethan McCarty [00:21:46]:
On, on our end we have two bedroom, it’s 195 a clean. They provide all the linens, you know, the sheets, pillowcases, all the, all the bath. Bath. What am I after here? The towels and rags, they provide all that. So 195A clean. There is no linen fee. You know, sometimes I know our one in the Smokies has a linen fee that we pay quarterly. This one’s just 195 a turn for us.
Ethan McCarty [00:22:09]:
And it’s, it’s been good. We’ve, we’ve been happy with that.
Tim Grillot [00:22:14]:
Yeah. On the condos, you know, just kind of, if you want to talk about general, you know, I’ve been seeing around 15 cents a square foot. I’m thinking about that. Right. It’s about 110, ish for like a 7, 800 square foot thing. And it varies on the, on the linen. It’s kind of like you can almost choose based on your cleaner. Some cleaners will offer both.
Tim Grillot [00:22:33]:
Some cleaners only do it one way or the other. And there’s, there’s, I’ll say like a, almost a flood of cleaners around those buildings. You know, it’s, they’re pretty easy to find and there’s lots of them and they all do it a little bit different. So it just kind of, it kind of, it’s a little bit of a personal preference, honestly.
Jonathan Lazzarino [00:22:48]:
I think on Tim’s note, I mean I’ve gotten different quotes from cleaners on the same property that have been pretty drastically different. But it’s about what they provide. And of course if you got pet friendly, which mine are in Fort Morgan are pet friendly, that’s going to be an additional charge as well.
Avery Carl [00:23:04]:
All right.
Bill Faeth [00:23:04]:
Yeah.
Avery Carl [00:23:05]:
And I think you kind of almost have to go pet friendly and you don’t have to but it’s a really good opportunity to because of the, the dog friendly beaches down there. So. Okay, now let’s talk about. Well, we’ll hit Internet first. That’s a boring one. Then I’ve got another, a bigger topic after that. So can you get typical high speed Internet basically everywhere here or is there anywhere that you have to fill in some gaps like with hotspots or satellite Internet or anything like that?
Bill Faeth [00:23:33]:
Pretty much. You can get fiber anywhere you want in the west beach area and most of the places out in Fort Morgan you can get access to that as well via media comm. I think there’s, I can’t remember. There’s like two others, John, you might know.
Ethan McCarty [00:23:50]:
Bright speed’s one. That’s what we have. Brightspeed.
Jonathan Lazzarino [00:23:52]:
Right. And they just ran Secure Vision. There’s a few different options. There are a few areas that are kind of spotty. I did have a client who had to get Starlink, I mean, which is now an option in this area. The RV park situation for me is kind of unique. So we had to run pay to run fiber out, which wasn’t cheap. But that’s a rare occasion.
Jonathan Lazzarino [00:24:13]:
Most areas will have access to high speed.
Bill Faeth [00:24:16]:
Here’s the thing that people need to understand. It’s the Deep south and if somebody can’t catch the Auburn Alabama game or UT Alabama or Georgia, you know, whoever. I mean SEC football is a big frickin deal down there. So you better have the opportunity for your guests to be able to watch football. That’s the only reason that I have cable, like, even in my number one property, I have cable going to one television and it’s in the main. It’s in the family room. Everything else is just all OTA over the air, smart TV stuff. But some people will not book and if they do stay in their fans and they can’t watch the game, they’re going to be pissed and you’re going to get a negative review.
Avery Carl [00:24:56]:
Yes. SEC football is. Is life down here. Very good call out. Because people do get pissed off if they can’t watch. Watch their football, which my team is entering the SEC next year, but we won’t get into that yet. I’ll take one more year of not. Not having.
Avery Carl [00:25:13]:
Actually. I think that will be fun because then I’ll have a dog in that. In that fight.
Bill Faeth [00:25:16]:
So anyway, I didn’t know Belmont had a football team.
Avery Carl [00:25:19]:
No, that’s. I went to masters there. University of Texas.
Bill Faeth [00:25:22]:
I know, I’m messing with it.
Avery Carl [00:25:25]:
Does Belmont have. They don’t have football, right?
Bill Faeth [00:25:27]:
They do not.
Avery Carl [00:25:29]:
All right, so next thing, this is a maintenance but also kind of falls into like, I guess the capex. So anything maintenance specific that we need to watch out for and what that kind of costs. We. We talked about this a little bit. With corrosion and salt air, you have to replace metal things more often. Anything else before we move on to like the cost to do amenities, which I think is what everyone’s waiting to hear, because that’s the fun stuff.
Jonathan Lazzarino [00:25:54]:
Right.
Tim Grillot [00:25:54]:
One thing that rolls into amenities is, and it’s also a maintenance item is making sure your beach furniture stays really nice. You know, we love using like the polywood type stuff that, that’s, that’s nicer and brighter and all that. But even anything that’s getting hit by salt water requires some level of maintenance. And you don’t want that stuff looking dumpy. I mean, that is first impression. And people use it every day. And that’s just guest experience stuff. You want to make sure they have nice furniture outside.
Tim Grillot [00:26:19]:
And then, you know, for us outside, that maintenance stuff is just like you said, any metal air conditioners outside, units of air conditioners get corrosion and things like that. So your door locks.
Bill Faeth [00:26:29]:
Door locks are a big one. A lot of people are using Schlagen codes. And when you use a Schlagen code, I would highly recommend understanding the warranty. You can submit that back if you have any moisture issues within the first 12 months. But also you can buy these moisture packets off of Amazon to put inside the battery. You know, holding area, whatever it’s called, and it’ll keep the moisture out to extend the light life of your Schlagen code locks. You know, I think, Tim, I think a lot of people buy like wood tables and stuff like that. They’re going to get molded.
Bill Faeth [00:27:02]:
You’re going to have to, you know, refinish them every year. Avery, you mentioned Capex. Make the investment. If you’re a new investor in Polywood, you, you just, you can buy the best wood table, chairs, weave, whatever, but that’s going to get freaking nasty within about four, four, probably four to five months. Same with bikes. If you’re going to invest, well, that’s an amenity. We’ll talk about that in a second. The H Vac is a huge deal, but in maintenance, one thing for me is someone that tries to elevate, you know, everything to super properties.
Bill Faeth [00:27:34]:
I spend about 60 to $75 a month during peak season per property for my handyman to come in and do what I call the 48 inches and down painting at every turn. He spends 15 to 20 minutes because we painted all of our walls flat. If there is an eggshell or a semi gloss or whatever, we’ll immediately come in, sand them down, paint them in the flat so he can walk through literally with touch up. He’s armed with all of our paint and just touch everything up. No magic eraser. You don’t have to paint the entire wall. Just little touch ups everywhere. So our houses look perfect and that’s one of the things that helps us from an investment standpoint.
Bill Faeth [00:28:12]:
Obviously if I, if I ever want to sell, it’s in great condition. But when our guests walk in, it looks like my brand new new construction at every house that I co host and also that I own on that 48 inches. And you will never, I shouldn’t say never ever, but almost never. Will you ever see a bag scuff, whether it’s on a wall or it’s on a trim piece. The other thing that I would recommend having your handyman or a contractor do is do one by twos on the corners of your drywall corners on all high traffic areas. That’s going to save you a lot of ongoing maintenance because people just, you know, especially kids walk around their bags and they’re slinging them around on accident. They’re just unaware and it hits the corners and then, you know, it gets down to like the, the metal piece and you kind of have to redo the drywall. So I think having one by twos and then if you really want to sustain that high level.
Bill Faeth [00:29:02]:
Literally. We touch up every turn during the summer at every property. Small investment from a maintenance side.
Tim Grillot [00:29:08]:
Hey, Bill, I got a question on that same note. And it’s something we’re experimenting with still. But exterior doors, do you have a paint you love for exterior? We’ve actually shifted to putting stainless steel on the bottom of them. They just take a bigger beating because.
Bill Faeth [00:29:21]:
Like a kick plate.
Tim Grillot [00:29:22]:
Yeah, a kick plate. And then also just the paint just because of it being exterior, it seems like the door just takes a bigger beating than the rest of it.
Bill Faeth [00:29:29]:
Yeah, you’re right. And like a lot of the houses now, you have like the little walkway that goes up inside and the same. We do the same thing with the walls there as well. We. We don’t use flat exteriorly. I don’t know what. Sure. My wife uses Sherwin Williams everywhere as a designer.
Bill Faeth [00:29:45]:
It is some type of satin finish. I believe in Sherwin Williams. We. I couldn’t tell you exactly what it is on the code, though.
Tim Grillot [00:29:53]:
Unfortunately, we’re experimenting with an epoxy paint on the exterior doors, but we haven’t. I don’t have enough time on it yet to know. So I’m just curious if you got anything on that.
Bill Faeth [00:30:00]:
So, yeah, I mean, ours. So like, most of our properties only have two exterior doors and that kind of falls into that same 48 inches. And down he will come and repaint those as well. I just look at. I think that, you know, you mentioned kind of the. The. The beach furniture, you know, which. Which gets trash because of the salt air and the sea.
Bill Faeth [00:30:20]:
The same with lights. A lot of people put in metal lights. We do all plastic, you know, lights to where they don’t corrode and do that type of stuff. But I think the look of your pillars, the look of the front door, the look of the walkway, the entryway, that sets first impression. So even if you have an average property, but that looks just nails when somebody walks in, like it’s brand new. It’s going to set the tone, you know, for their psychological. Their feeling when they walk in and those expectations.
Avery Carl [00:30:48]:
Okay, so I think now we’ve got gone on some maintenance things. Anything else related specifically to maintenance before we move on to the costs of adding amenities? All right, so what are some amenities that. That add income? I’m not talking about adding value to, you know, the appreciate. I mean to the appreciation to the equity of the home. I’m talking about income. So I’ll start. Biggest one is going to be a private pool in My opinion, other people might have a different opinion on that. I think you’re in better shape buying a property that doesn’t have a pool and adding it in terms of how much that actually costs than buying a property that already has a pool.
Avery Carl [00:31:25]:
But what are we looking at in costs to either add or just if there’s an existing pool, just keep, keep that running.
Bill Faeth [00:31:32]:
I’ve, I’ve done three pools down there in the last two years. They. My average is around 50,000. That’s with a gas heater Hayward, 450,000 BTU and 1500 bucks for shoot. I can’t remember the name of it but the, the WI fi management where I can manage everything remotely. Running the date on that with Kenny from STR Insights, the pool and people can have their opinion, Avery, but nobody can debate you on that because the data shows that you should be able to get a 24 month or lower return on investment on that 50 to 60 thousand dollars investment. But the pool’s got to have a heater, you know, so you can’t put just a regular, just a pool in without a heater. At bare minimum, put in an electric or upgrade to the gas heater.
Bill Faeth [00:32:22]:
The pool 100%. Interestingly. And the number one, and I’m going to quote Kenny’s data here, we just did a podcast about this. Kayaks are the number one revenue driver based on cost to implement as an amenity in Fort Morgan. Not the same in, in West Beach. And you would think that it was pets like you said. I thought it was pets. I argued with Kenny about it.
Bill Faeth [00:32:47]:
And buying two kayaks and putting that onto a two to a six bedroom property in Fort Morgan will add more revenue than being pet friendly in Fort Morgan, believe it or not. So one of the things is really do what you teach, Avery is look at the enemy method. Do use the enemy method. Look at what your competitors are doing, what amenities they have to go and drop in. I just spent $12,000 to add cabanas on the back of my pool. I planned on doing that so I already had an extra concrete poured back there. But when I looked up and down between west beach and West Lagoon, nobody has shade. And when you see these people with pop up tents and they’re zip tying them to the rails and their beach, you know, umbrellas that are blown over and don’t give them any shade, it’s not going to add direct value.
Bill Faeth [00:33:33]:
I can’t, I don’t believe I can charge more. So I’m already at the top price point. But I believe it gives me marketing capability, that it’s going to increase my occupancy level at my highest point, so I get an indirect return on investment.
Avery Carl [00:33:47]:
All right. The cabanas do. It does sound cool because it looks very like Vegas and sharp like in the photos, I think. And then obviously, aside from just the esthetics of it, it would be nice to have some shade sometimes when you’re at the pool.
Bill Faeth [00:34:02]:
So especially for you. Right. You’re a mom with kids, and you can only lather them up with so much sunscreen. Sometimes they need to cool down and get in some shade. Right. So I think if you think about those things. So I don’t want to go too deep into this, but just I think about my ideal buyer and Avery Carl, a mom who is a value based buyer, very discerning traveler that you would be right in my demo. Right.
Bill Faeth [00:34:27]:
You’re not looking for the $200 cheap property. You’ll look for something nice for you and your family. So how am I going to market to Avery specifically? You are exactly why I put those cabanas in it. When me and my family went down there, I never went under them one time. But you know what? My girls were in there. That’s where the sunscreen’s being, you know, distributed. That’s where the phones are sitting, you know, so think about that ideal buyer and who you before you put in your amenities.
Avery Carl [00:34:52]:
Absolutely. So we got pool, we got cabanas, we got kayaks. What about paddle boards? Have we. Have we looked at anything separating kayaks and paddle boards are kind of similar? I guess they’re.
Bill Faeth [00:35:03]:
They’re pretty much the same bikes. If you’re in the west beach area, a pretty big one in Fort Morgan, unless you’re in Morgantown or Kiva or someplace to where you can actually ride around in the neighborhood. But bikes are a big one in Kiva. Fort Morgan golf carts. I think I was probably one of the first people to have a golf cart in Fort Morgan years ago. Golf carts are illegal unless they’re street legal, you know, in the city of Gulf Shores. But I think that the other thing is, honestly, I believe that I have no data to back this up, but I’m considering putting in a hot tub in my Fort Morgan property because I don’t have enough room between the property and my property line going to the beach to put in a pool, because I think that will help me in the shoulder season. You know, I don’t think anybody want to be in a hot tub down there right now.
Bill Faeth [00:35:46]:
It’s so damn hot. But I think a $10,000 and $12,000 investments worth the risk for me. I think I could definitely get two or three more bookings to be able to pay for that in the first 12 months.
Avery Carl [00:35:58]:
Awesome. Do they have the golf cart rental places there or you pretty much have to own your own.
Bill Faeth [00:36:04]:
There’s a few. There’s island golf carts and a couple of others that are around there. But it’s a small segment. It’s really just that kind of those communities in Fort Morgan that are renting them. I don’t know about you guys that own in the city, but I seem to get five to 10 requests, you know, for golf carts on an annual basis across my portfolio. They’re just not legal because none of the rental carts, at least that I’m aware of, are street legal.
Jonathan Lazzarino [00:36:31]:
Right. And you’ll see some places like the Rookery and where people have golf carts that live there. But if you think about it from a guest that’s trying to cross Fort Morgan, I wouldn’t feel comfortable having one there for liability reasons. I mean, people can shoot right across Fort Morgan, but people are going 75 miles an hour down that road. And so like, like Bill saying, Morgantown, Martinique on the Gulf, some of these communities that are in Fort Morgan, south of Fort Morgan Road, those are really the only places I would ride now. In Orange beach and some of the residential sides and areas by the wharf, you can ride golf carts. They are expanding the golf cart paths there, but there’s not going to be too many short term rentals that’ll be able to utilize that.
Avery Carl [00:37:14]:
Interesting. Good to know because I think a lot of people see beach Market and they just think, oh, golf carts. But you’ve got to know where you can use them and where you can’t.
Tim Grillot [00:37:22]:
What about the E bikes, Jonathan? I know you, you and I have talked about that a little bit. I know that’s getting to be more of a thing you see in that a lot.
Jonathan Lazzarino [00:37:27]:
Well, I personally love E bikes, especially getting on the Gulf State park, because you can access a lot of cool places on the Gulf State park. And you know, you go all the way to the beach and there’s some restaurants. So if you’re on the Gulf State park, those are awesome. And you can get even into Fort Morgan a little bit. But it does cut off. They’re expanding the, the bike paths as well to where you can go all the way to the Fort Morgan Pier and then get into, into this Gulf State Park. So eventually over the next Couple of years it’s going to be even more bike friendly and I’m pumped about it. But as of right now, you are somewhat limited.
Jonathan Lazzarino [00:38:02]:
But if you’re on the Gulf State park, it’s amazing.
Tim Grillot [00:38:04]:
But correct me if I’m not saying.
Bill Faeth [00:38:05]:
There’S zero chance I’m riding a bike on, you know, in Fort Morgan on that highway. Those people are crazy.
Jonathan Lazzarino [00:38:12]:
I’m with you there.
Tim Grillot [00:38:13]:
There’s zero chance I’m not riding around with alligators and stuff. But that’s what Jonathan likes to do. Those alligators and the snakes in the park. But they are legal. Some places where golf carts aren’t though, right?
Jonathan Lazzarino [00:38:24]:
Yes. Well, there are a lot of places you can go with those and there’s even bike paths like on Perdido Boulevard. You know, you can, you can go a lot of places on. On e Bikes for sure.
Avery Carl [00:38:34]:
Cool. All right. Any other amenities that are worth calling out that we might need to talk about how much they cost in order to. To get started with a rental here?
Tim Grillot [00:38:43]:
I mean, some basic stuff. If you’re, if you’ close to the beach, you know, having just basic. We’ve talked about this in other ones, but chairs, chairs, towels, umbrellas and a wagon. You know, some of the basics. You know, if you have some basic beach toys and stuff like that, that’s a pretty small investment. You know, for, you know, a thousand fifteen hundred dollars, you can get all of it, you know, or maybe a little bit more than that, but somewhere around there. It depends on the size of your property and how much stuff you’re buying, I guess. But that is a biggie.
Bill Faeth [00:39:07]:
Spend the money for the balloon tires for your guests on the cartoon.
Avery Carl [00:39:11]:
Otherwise it’s too hard to pull through the sand.
Bill Faeth [00:39:13]:
Yeah, it is in my opinion. I mean, I think some. I think I’m going to go back to your enemy method, Avery. I think really what I would suggest for people from a marketing perspective and a hospitality perspective is look at what your. Your competition not only at your level, but at least one level above you and either what they have or what they don’t have and just make a list. I mean I have a va do research on that every week for me to where I can see and I mean it could be a coffee bar, it could be video games. You know, I mean I actually put video games in my properties down at the beach. They have to have something to do when it rains and it does rain down there once in a while and then that helps me, you know, pull on.
Bill Faeth [00:39:51]:
On the kids to tell mom I want to go there because they have video games or whatever that is. So just think about what the competition does not have or look at their. Their positive reviews and see what guests love about their property and when they talk about amenities to make decisions on additions.
Avery Carl [00:40:07]:
Totally agree with that. Anything else? We’re getting to the end of time here. Any other amenities slash expenses that the listeners could benefit from hearing about that we haven’t talked about yet?
Bill Faeth [00:40:18]:
I think one thing just from ADR and a price point is tax. The tax difference between being in the city of Gulf Shores versus being in for in Fort Morgan in the county. I think 10% difference, right, John? I think it’s 6% versus 16%. Is that right?
Jonathan Lazzarino [00:40:33]:
I think it’s. I think it’s 7% versus 15 going up to 16.
Tim Grillot [00:40:39]:
But you actually.
Bill Faeth [00:40:39]:
September, right. Is when it goes up to 16, right?
Jonathan Lazzarino [00:40:43]:
September, that’s right.
Bill Faeth [00:40:44]:
So you just need to think about those standpoints, especially when you’re looking at numbers. So if you’re looking to purchase and you’re using Air, DNA, str, Insights, Rabu Match, visor, whatever you’re using to run your performance, understand that you know you’re going to pay tax on that gross revenue and it’s going to be different in the city than it is in the county.
Jonathan Lazzarino [00:41:00]:
Very good point.
Ethan McCarty [00:41:01]:
Another thing I want to mention that you think that I. It’s from experience. So if you buy in late in the season, you have to carry your cost through the off season. So just make sure that you’re budgeting correctly or if you’re buying late and you have those funds set aside for those expenses that come through.
Avery Carl [00:41:17]:
Yeah. Well, do we. Let’s real quick break out the taxes between like, what is local, what state, hotel occupancy, those, all those words. What are we paying in this market? Just break that out for me.
Jonathan Lazzarino [00:41:29]:
Well, we were talking about the lodging and occupancy. So it’s like 9% in the. Well, I’m trying to think of the actual breakdown. It’s 9% for the county, 2% for the. Well, no, 6% for the county. I’d have to look back at the breakdown. I can’t remember off the top of my head.
Bill Faeth [00:41:47]:
Do you know, Bill, I don’t know the breakdown. I think it’s 7% total in Fort Morgan in the county, and it’s 15% going to 16% next month if you’re in the city of Gulf Shores. But I don’t know exactly what the breakdown is.
Tim Grillot [00:42:00]:
Yeah, I just know the total too. So all right.
Avery Carl [00:42:03]:
Well, that helps. So any anything else in terms of expenses that the folks need to hear? No. All right. Silence.
Bill Faeth [00:42:13]:
You covered it all.
Tim Grillot [00:42:13]:
Long pause. Long pause.
Avery Carl [00:42:16]:
All right. Well, thank thank you guys all for being here. Thanks for your time and the knowledge you’re contributing. And if you guys want to know more about this market, you can feel free to reach out to Jonathan, jonathan@theshorttermshop.com or you can reach out to agents@theshorttermshop.com we’ve got a Facebook group, same title as my book called Short Term Rental, Long Term Wealth. You can come join us there if you want to learn more. And we look forward to hearing from you guys. Thanks so much for being here, y’ all.
Tim Grillot [00:42:43]:
Thanks, everybody.
Bill Faeth [00:42:44]:
See you guys.
Avery Carl [00:42:45]:
See ya.
FAQ: Short Term Rental Costs in Gulf Shores
What are the average monthly costs to run a Gulf Shores STR?
This depends on property size, location, and management style. Most owners will pay for utilities, cleaning, insurance, maintenance, and platform fees. HOA dues may also apply.
Are Airbnb expenses in Gulf Shores higher than other markets?
Compared to inland markets, Gulf Shores properties may see slightly higher utility and maintenance costs due to coastal exposure, but lower property taxes and STR-friendly zoning help balance it out.
What costs do new investors often overlook?
Deep cleans, storm prep, pest control, and ongoing amenity upgrades are easy to underestimate.
How can I estimate my expenses before buying?
Use tools like Airdna, walk through past utility and repair records, and lean on guidance from experienced STR-focused agents.
Who is the best agent in Gulf Shores for short term rental investors?
The Short Term Shop has helped over 5,000 investors purchase more than $3.5 billion in vacation properties. We’re a Top 20 U.S. real estate team (WSJ RealTrends), and we provide every buyer with tools, data, and post-close training to help them self-manage their investment from anywhere.
Disclaimer
This content is for informational purposes only and does not constitute financial, legal, or investment advice. Always consult a licensed professional before making investment decisions. The Short Term Shop does not guarantee rental income or performance on any property. Market conditions, regulations, and costs can change—invest wisely and do your due diligence.