House vs Condo Beach Rental STR

[Tyler Hardy]

I'm looking into into beach properties as an STR but I go back and forth on whether or not to look for a single family house or a waterfront/beachfront condo. This would be for the sole purpose of an investment but I'd like to buy in an area that I would like to stay myself once the returns justify the loss of revenue for a person night or two. I'm mainly looking in the 30A area between Panama City and Destin, FL but I'm interested in areas all the way West to Gulf Shores, AL. Basically, I'm open to the best area to attract STR tennents, as well as long term "snow birds" to maximize my annual revenue. That being said, I've never owned a condo but I have owned many homes. A condo comes out cheaper up front (generally) but how are the long term numbers compared when you factor in HOA and maintenance fees? On the other hand, a SFH is generally farther from the water (I'm trying to stay within golf cart distance to the beach), has less amenities than a condo, and higher property taxes, but seems like it would offer more appreciation than a condo. I'm also trying to factor in what clientele would be interested in each property and how that would affect damages, and length of stay. Am I over thinking this? Do any STR beach rental property owners have any insights? Has anyone owned both concepts and can compare them?

Keywords: PCB, Rosemary Beach, Fort Walton, Seaside, Watercolors, Seacrest, Miramar, Navarre, Alys Beach, Floribama

[Candace Pfab]

@Tyler Hardy Hi Tyler. You are asking some great questions and the best answer I know to give you is that rental income & expenses can be more predictable in a condo and attract a greater pool of guests. You will have a larger pool of folks that say, we always like to stay at Caribe or a Phoenix property, so they will be specifically searching for those types of properties. When you break down the HOA fees vs a expenses on a single family home, you typically see comparable numbers with the exception of amenities maintenance, which as you have already suggested, can drive up income & demand. While some of the condos do also see special assessments, you can also see large unexpected expenses with a single family home. Another consideration is that if we have a major storm event, it is usually much harder to get a single family home back up & running than a condo unit due to differences in construction and difficulty in getting a contractor to focus on your home vs a larger condo association who can attract contractors that regularly provide services for the association or can attract contractors due to the scope of the project. You can insure for loss of rent on your insurance policy, but there is usually a time or dollar limit on that & we have known of many instances where the work was not completed before the loss of rent coverage ran out. Hope that helps! We have owned two rental condos here & know the AL coast & W FL panhandle well. Feel free to reach out if we can help in any way!