Get Your Head out of the Sand and Check out these Five Beach Markets
Sand between your toes, crashing waves, and the smell of SPF baking into your skin. Everyone wants an escape to the beach, so naturally beach markets are amongst the most desirable in the STR community. While many investors are scrambling after properties in Gulf Shores, Destin, Surfside, or even Key Largo, it's extremely difficult to find higher than 20% Cash on Cash returns in these more known markets. These markets may have been touted as the crème de la crème, but the beach markets we’ve found using STR Insights make those look like mincemeat pie. Though the masses may be flocking after these markets, these markets now have more investors than seagulls lining their beaches. I refer to these markets as “tier one markets.” Everyone loves familiarity, yet everyone has already figured out the returns on these markets; consequently, the returns have dwindled significantly in the last two years. “Tier two markets,” on the other hand, are less sought-after markets with higher ROI’s. So, ignore the clamor, stick to your high ROI goals, and check out the following “tier two” beach markets before the rest of the seagulls figure out what’s available on these beaches:
5. Gulf Breeze, Florida
We’ve all heard of Gulf Shores, Alabama but Gulf Breeze, Florida? Gulf Shores is located on the gulf, across from Pensacola and offers a variety of attractions. Families and couples alike are drawn to this area to experience the white beaches, lush marshes, and diverse wildlife belonging to the Gulf Islands National Seashore. This park attracts as many as 5.6 million annual visitors, placing it right below the Grand Canyon as one of the top 10 most visited National Parks! So, let’s talk investing–STR Insight’s data reveals that the average price of a vacation rental in this market is just at $1 million and the average revenue on the beach is at $185k. It’s only a matter of time before this market makes its statement as one of the best markets on the gulf.
4. Port Bolivar, Texas
Located on the Bolivar Peninsula, Port Bolivar is just a ferry ride away from Galveston Texas. While Galveston offers all the urban excitement one could possibly find, visitors can ferry over to Port Bolivar for the quiet sanctuary of beaches, lighthouses, and bird watching. They say everything is bigger in Texas, and the numbers only validate that phrase. Who knew you could find a 4-bedroom on the beach for less than $1 million which generates over $175k? Like I said, everything’s bigger in Texas!
3. Hampton, Virginia
While Hampton Virginia may not offer all the attractions of a beach destination, it offers a myriad of cultural attractions including The Virginia Air and Space Center, Hampton Coliseum, and the Fort Monroe National Monument. Familiarize yourself with Hampton, Virginia, as it’s an excellent example of a “tier two” market. Hampton is an ideal destination for those who are on a budget and desire a more relaxed environment than some of its more touristy competitors. With the average vacation rental price of $381,000 and $85k revenue, this is one of the more affordable beach markets in the country. Invest in Hampton and provide visitors a better place to stay than the Hampton Inn.
2. Ocean Isle Beach, North Carolina
Where do beach travelers go who don’t like Ferris wheels, cotton candy, condo high-rises and all the commercialization of Myrtle Beach? They drive less than an hour north to Ocean Isle Beach. A much quieter beach where families will enjoy the sound of crashing waves rather than the sound of carnival rides. According to STR Insights' data, the best performing bedroom counts are 4 and 5-bedrooms. Ocean Isle is one of the few places I’ve personally seen 4 or 5-bedroom beach front properties listed for sale under $1 million with the potential to perform between $150k to $215k.
1. Gulfport, Mississippi
Really, Mississippi? Mississippi’s reputation may precede it; however, Gulfport, Mississippi may earn a reputation as the place where STR wealth flows like the Mississippi River itself. Gulfport is the second largest city in Mississippi, offering a wide variety of sites and attractions, including its beaches. Where else can you find a beach property for less than $500k that makes more than $100k gross revenue? It’s not hard to figure out why this is our number one emerging beach market.