STR in Alabama

[Erica Calella]

Looking to gain some insight on the Alabama coast STR market.

During the 1970s, my grandfather bought two land plots on the Jersey Shore and built a house on each for $5-$10K. Today these houses are valued at $700K- $1MM (original home structures).

I'm looking to do something similar, but the East Coast has obviously appreciated significantly since. Does anyone have any experience in the Gulf Coast? I recently discovered Dauphin Island online and was wondering if this would be somewhere that would experience significant property appreciation.

[Ricky A.]

@Erica Calella, take this with a grain of salt because this is based on my limited experience in the area.  We vacation there regularly:  Dauphin Island - 2017, Orange Beach - 2022, Gulf Shores - 2023, Fort Morgan - upcoming 2024.

My guess is that Dauphin Island doesn't see the same appreciation as Gulf Shores, Orange Beach, and places eastward.  But that may mean getting in there could be at a lower price point.  A good agent could answer that quickly.

I remember Dauphin Island as having a totally different vibe compared to the places on the other side of Mobile Bay.  Specifically, it's much more low key and much less to do.  Fortunately, it does have a few restaurants on the island.  It's probably good for a low-key, low crowd vacation.  It might also have a draw for eco-tourism.  (I grew up in North Alabama, and we had a science field trip there in middle school once).  

There's a lot of research you could do on VRBO/AirBNB/AirDNA to compare similar properties in terms of rates and occupancy, but my experience is that Gulf Shores and Orange Beach are more popular because of the nearby amenities, nightlight, recreation, and other things to do.  I also think the quality of the beach (i.e., the sand and the water) is better in Gulf Shores and Orange beach...I have a theory that the beach gets better the farther east you go...will have more info on that in a couple weeks.  

I believe Dauphin Island also suffers from the eyesore of all the offshore oil rigs that are visible.  This might also be an issue in Fort Morgan , but we couldn't see any when we were in Gulf Shores or Orange Beach.

In the end, it comes down to one thing:  Orange Beach/Gulf Shores has a Buc-ees nearby, so of course, they'll have better appreciation :)