Seeking insights: any STR hosts in Okaloosa Island, FL?

Question

Hey all,

I'm wondering if any of you has Short-Term Rentals in Okaloosa Island, FL.

If so, would you be willing to share your experience running STRs in this area? I'm curious about the demand for vacation rentals, especially with the presence of large hotels and beachfront resorts. Appreciate any insights!

Villy Ellinger · Answer

@Emily Anderson Okaloosa Island is my favorite!!! Seriously! I own three vacation rentals there (at Azure, El Matador and a townhouse on Bream Ave) and I mostly sell there. Also, I love to spend time there. I'm considering adding to my collection on the Island :-). I'm taking a closer look at Venus and Pelican Isle (I like the smaller units).

Yes, there are some hotels on the Island and they add competition, but not as much as some other places. Demand for Okaloosa Island is steady and growing. There are a few unique things about it that really help out:

1) Okaloosa Island has a height restriction for all building because of the proximity of military installations on the island. That prevents 20+ story buildings being built there, hence prevents overcrowding and oversaturation of STRs that you see in Destin and PCB currently.

2) There is a large portion of the north side of Okaloosa Island which is strictly residential, where STRs are NOT allowed. That is actually a GOOD thing for those of us who have vacation rentals there, because it prevents oversaturation of rentals. Also, it prevents overcrowding (like the height limit). That alone keeps demand for rentals higher. Most vacationers don't want to be stuffed like sardines on the beach and surrounding areas.

3) Okaloosa Island is one of the ONLY beachfront resort areas on the Emerald Coast where there  are seven public beach access point with parking, restrooms, outdoor showers and picnic areas. If you have ever been to Panama City Beach, you have probably noticed that all the public beach access points there have no parking. Pretty much the same in Destin. So unless you are staying right on the beach, you really cannot get to it easily. Try getting to the beach on 30A if you are in one of the rentals a block away, lol. That is not an issue on Okaloosa Island, which means that STRs on the north (the Sound side, in the portions where they are allowed) can access the beach with no issue, yet the prices for those properties are much lower. That is where my townhouse is. I am looking to buy more on the north side as well.

Yes, traffic on and off the Island can be rough in the busy season. But that is universal for the Emerald Coast. Also, the Brooks Bridge is being rebuilt (big project that is eventually supposed to make traffic issues better), which is causing some concern with some investors. I have not seen a drop in tourist interest because of it so far.

Another thing to point out, Okaloosa Island is the closes beach on the Emerald Coast to the VPS Airport (unless guests arrive in Pensacola). It matters for demand.

Lots of family friendly things to do on or near Okaloosa Island.

A bit lacking in restaurants, shopping, night life, etc, but it's very close to Destin, where all that can be found within a short drive.

Lake Lutes · Answer

Hey Emily! Okaloosa Island is killer. I have helped a bunch of clients buy on "The Island" as locals call it, and I run BnBs in Destin! I live around just over the bridge from the island in FWB.

Demand stays really high March through October, and slows for the 4 winter months, just like Destin.

If I can help you run numbers on properties or give you any insight please let me know! I am happy to help!

Ricardo Hidalgo · Answer

People either want gulf from when they rent or bigger single family homes with good amenities. Ideally that what every buyer on the beach is striving for or building towards when they start their investment journey. Have to start somewhere and get some benefits then start scaling!

Emily Anderson · Answer

@Ricardo Hidalgo Thanks Ricardo!I agree with you that for townhouses, the strategy is appreciation and not solely STR revenue. I can see that the top performing type of properties south-west of Santa Rosa Blvd are 2 bed / 2 bath units.

Also, I noticed that the type of properties in this area that had over 30 reviews in the past 12 months are apartments, not townhouses or detached units... so maybe there is only demand for this type of property? not sure

Emily Anderson · Answer

@Matthew Tregoning thanks for your inisght!I agree. I have checked the number of reviews across all the bnbs on the island and I can see that the slower months are between November and February, as mentioned by @Lake Lutes (thanks btw!

Something I don't understand is the peak season. Is it on July, or May? Or both?

Ricardo Hidalgo · Answer

We have sold several gulf front investments and townhomes off the beach. From what I've notice is that most of the gulf front investments are appreciation based with break even or lower net profit on cashflow. The ones that are a few blocks off the beach provide better cashflow opportunities and appreciate less but most people looking for value may go for those opportunities a few streets off the beach.

Matthew Tregoning · Answer

We have a STR at Destin West/Gulf Side on Okaloosa Island and has consistently been booked and profitable. Winter months tend to be very slow, but the busy summer months make up for this.

Seeking insights: any STR hosts in Okaloosa Island, FL?

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