Location considerations for a vacation beach house

[Sherrie P.]

Someone else posted the question below, but I don't think anyone responded. So, I am re-posting because my husband and I are in the exact same situation. Any advice?

My husband and I are considering buying a beach house/vacation rental on the gulf coast. We are incredibly flexible in our location but would like something between Dauphin Island, AL and Seaside, FL. This encompasses all different styles of beach community from sleepy Dauphin Island and Seaside to lively and more touristy areas like Gulf Shores and Destin. Our primary objectives are highest rental return for dollar invested (ROI) and to own a place that we would enjoy staying in. Any idea if the return on beach front is better or worse than 2nd tier? I can pull rental rates to get a per week reference but can't make out whether the beachfront might rent more weeks per year or not. Also, any guidance on which would be better, hip and happening vs sleepy beach town? Obviously, touristy areas like Destin would draw more potential renters BUT you are also competing against a thousand condos for rent in the dozens of high rises. Any particular geographical considerations which we need might need to think about? Does a home in a gated swim/tennis community such as Watersound or Kiva Dunes rent better than a one off on the beach?

I honestly think that there are opportunities to make a profit all along the coast, but our aim is to maximise out investment as much as possible. I would be interested to get your perspective.