How Rare are Oceanfront STR's and BNB's in your State and the United States?

[AJ Wong]

When it comes to returns on investment for coastal short term rentals or vacation homes, a prime characteristic can be proximity to the beach or an oceanview. Having helped several clients obtain oceanview properties in the past several years that have subsequently become highly successful AirBnB's, I recently assisted a client with my first oceanfront property sale, that has rapidly become a popular BnB option and the question arose, just how many oceanfront STR's are there? Not only here on the Oregon and California Coast's but beyond?

For the better part of the past two decades I have lived on or within a half block of the sand. Several of my properties have been successful AirBnB's, but none have been oceanfront. It's difficult to ascertain an accurate metric of the total quantity of overall oceanfront properties in Oregon (any suggestions) but my best guess is that there are 800-1000 actual SFR homes? I suspect at least 50% are full time or secondary residences.

So, potentially 4-500 SFR homes and a fraction of that with optimal actual beach access and eligible for a short term rental permit. I'd be willing to guess there are fewer than 50-75 active SFR oceanfront vacation rentals in the STATE of Oregon.

Having lived in coastal FL, CA, MX and traveled every inch of Oregon's coastline, investors still acquire considerable value for OR oceanfront investment.

For example: The most recent oceanfront STR my client acquired sold for $1.5M with a down payment of 15% and seller concession of 1%. With projected gross revenue of $150k+/- The cash on cash return is attractive and the underlying asset is difficult to reproduce at the valuation.

At present by my calculations there are currently 4 oceanfront properties actively on the market that can obtain a permit outright and another 3-4 that can secure a vacation rental permit on the Oregon Coast within six months. The others would be limited for vacation rental usages by HOA's or local restrictions. So in total 2-3 dozen oceanfront SFR listings in the entire State of Oregon.

On average a moderate oceanfront home that is not eligible for STR usage is attainable with a $750K+/- budget and SFR eligible for vacation rental usages are $1M+ in the $600-1k/SF range.

Looking beyond, to let's say my home state of Florida. How many houses (not condos) but actual houses are there on the ocean to begin with? I used to live in one of the most exclusive enclaves in Florida, Hillsboro Mile, where the starting price for a oceanfront home now is in the multiple 8 figures, same for Fort Lauderdale, but within our investing lifetime entry price point was in the low seven figures. 

I only mention this because at present valuations,  it is unlikely the existing oceanfront homes in South Florida, would make for a high yield return vacation rental. 

I have looked at investments and am aware that on the West and Northern Florida Coast's there are very attractive oceanfront ROI opportunities, presumedly because valuations are more reasonable?

So, how many oceanfront vacation rentals are there in the State of Florida? That you could book online right now, walk out the door and put your toes in the sand? 

Thousands? Or hundreds? Either way that would be a niche and unique asset class. 

Unrelated question, what is the highest grossing oceanfront vacation rental you have seen hard financials for? Or, better for investment analysis, highest pound for pound return? 

A luxury oceanfront Duplex that was listed for $2.5M recently sold in Rockaway Beach OR for $2.1M and averaged $300k Gross income the past two years. That was impressive production. 

Curious to hear about your State or other luxury destinations?