I'm not sure this will ever change, and I'm not sure beachfront will ever be a 10 cap again unless you're looking in a very undesirable STR area.People have traditionally bought beach homes as true 2nd homes. 

Melbourne is across the river and Melbourne Beach is a few miles south.I agree with the others that this is likely not a good deal at this price but what makes it more of a bad deal for me is this particular street looks very undesirable.

Generally considered an undesirable place to live.- NE Turkey creek - Good area, nice houses, convenient location but I stay the hell away from here because it's a flood zone.

If a unit is not rent controlled, the least problematic way to get rid of an undesirable tenant is to raise the rent above market rent.  

There are a lot of unqualified/undesirable tenants in this market.

Answer: if you are getting action but no applications, you are either priced too high for the market in general or too high for the specifics of the house (size, location near undesirable stuff, too far from town, etc).

There are definitely pockets of town that are undesirable as there is in EVERY city.

This can lead to some very undesirable properties, tenants, and owners.

So you got your drug addicts, hookers, child molesters, rapists, thieves, meth heads, gang members and other undesirables......So the answer to your question isn't relevant to where you live.

In order to get $500 a month is net cash flow it will take you 2 multi unit properties, unless you are creative, put down a large sum of money, or are in an undesired (war zone) area.