Renting Your Dream Vacation

With few big hotels here, most visitors stay in privately owned houses and condos

It happens nearly every day. Someone’s bare feet sink deep into the soft, impossibly white sand on one of our beaches. Their eyes get lost on those emerald green waters, stretching out to the furthest reaches of the horizon. Maybe they see dolphins jumping or the sun tucking in under a blanket of brilliant reds and yellows. They sigh, glance around, feel themselves relaxing and think, “I want a piece of this for myself.” According to the Emerald Coast Association of Realtors, nearly 14,000 homes were sold in the region last year, proof that the dream can easily — and relatively quickly — become a reality.

ResortQuest by Wyndham Vacation Rentals features this cute coastal rental home, called Our Blue Bonnet. Located in Inlet Beach it features a Gulf view along with four bedrooms and a loft to sleep 12.

courtesy of ResortQuest

“When you consider the condition of the market, there is not a better time to buy,” said Lino Maldonado, vice president of operations for ResortQuest by Wyndham Vacation Rentals. “Money is cheap, and prices are still low. All indicators are that people should jump in now.”

courtesy of HomeOwners Collection

Unlike resort areas in other parts of the United States, there are few large hotels here. The 4.5 million visitors who travel to the Emerald Coast each year tend to stay in houses and condominiums owned by private individuals and typically managed by local firms. These vacation rentals run the gamut from being just a place to stay to providing a nearly all-inclusive resort experience.

“Our story has really resonated with consumers,” said Scott Russell, a partner in Russell Vacation Rentals, which specializes in vacation condos and homes near Destin and South Walton. “Being in a vacation rental allows you to fully immerse yourself in the destination. You can unwind, relax and explore the community. When people leave here and go back to their homes, they truly feel like they’ve been on a vacation.”

Selling the Coast

“Right now the demand is high and supply is low,” said Dana Fairchild, a Realtor with Beach Properties of Florida. “Gulf-front property is selling really fast. We’re on track to do better this year than we did in 2013 and 2014.”

Most Emerald Coast vacation-home owners buy here because they want to use the property themselves at least some of the time. Many choose to rent their property out to guests when they aren’t using it themselves to help their budgets, which is exactly what Emerald Coast vacation rental pioneer Jeanne Dailey, the founder and CEO of Newman-Dailey Resort Properties, recommends. She’s been managing properties in the area since 1983.

“Find a location that you love and would want to stay in as a vacationing guest,” Dailey said. “People buy homes in this area because they want the American Dream, they want to own a second home. Being on a rental program gives them a way to generate the income to afford that dream.”

COURTESY Sandestin Golf and Beach Resort^® 

With 100 miles of beautiful Emerald Coast beaches to choose from, where should someone who wants a vacation home start looking? It all depends on one’s budget and interests, Fairchild said. Prices, she said, range from about $400,000 to nearly $12 million for a Gulf-front location. But a place that isn’t on the water can be found in the $200,000 range.

Condo owner Steve LaForge, who lives in Chickasha, Oklahoma, said he knew he wanted a place somewhere on the Emerald Coast because he loves the area and can drive here from Oklahoma or fly in. For him, buying in Panama City Beach made the most sense.

“I can step off the airplane and be in my condo in 15 minutes,” LaForge said.

LaForge uses his condo, located in a beachfront high-rise, for a few weeks each year, and his grown children use it, too. The rest of the time, he rents it out.

“I could let it sit empty the rest of the year, but I figure I might as well pick up the $30,000 rental income that I would be passing up by not renting it out. I could probably buy another unit just like the one I have and pay for it from the rental income,” he said.

The Villages of South Walton courtesy of ResortQuest

Many owners, like LaForge, have found that owning beach property here almost, if not completely, pays for itself when the owner commits to sharing his or her home with paying guests. The process is fairly simple: A prospective owner, working with a Realtor, finds a property he or she is interested in purchasing and, as often as not, the Realtor recommends a management company. The management company submits a projection of the rental income the potential owner can expect, allowing the buyer to decide if the home is affordable.

Amanda Ferguson, the director of the rental management program for Sandestin Golf and Beach Resort, said that her team talks at length with potential buyers to find out what they want from their property. Their goals will determine which properties they’re shown.

“If someone just wants an investment, we steer them to areas with amenities and conference potential,” Ferguson said. “Those generate more year-round business.”

Other owners, she said, might plan to spend the entire winter in their unit and then rent it out during the summer, in which case there are other properties they’re more likely to find appealing. Ferguson said that she’s able to provide owners with a detailed analysis of how much similar properties are earning.

It’s important for prospective vacation-home owners to know what they’re getting before making such a large investment, said Ashley Hamm, the CEO of 360 Blue, a management company that works primarily with properties along the Scenic Highway 30A corridor.

“A homeowner should look for a 7 to 10 percent gross rental income based on the purchase price, before commission or maintenance,” Hamm said. “Higher than 7 to 10 percent is incredible; lower than that and it should be a property that the owner plans to primarily use for themselves.”

Hamm said that 360 Blue charges owners 20 percent of the rental price as a commission. She explained that some companies might charge a bit less and some might charge more, depending on the amenities that are included. The amenities, particularly in homes along 30A, can be impressive. In some areas, guests and owners have access to golf, tennis, boating, beach clubs, child care, preferred beach parking and special discounts in stores and restaurants.

“Some places, you book a home, and a home is all you get,” said Dru Zeiset, the general manager of vacation rentals for the St. Joe Club & Resorts. “We’re trying to create more of a resort experience.”

Making the Leap

Once owners have found their vacation home, they have to decide whether to sign with a management company or to manage it themselves. Websites such as VRBO, Homeaway and Airbnb make it easy for owners to advertise, find renters and book their properties.

“A lot of people, when they look at a vacation home, they toss around the idea of managing it themselves,” Hamm said. “People don’t want to lose access to their home, and they’re skeptical of the wear and tear. We can’t promise or guarantee anything, but that’s why you have a professional management company.”

Amy Gleaves has been using VRBO.com to manage her Panama City Beach townhouse for almost three years. Gleaves, who lives in Pegram, Tennessee, said her family keeps their place rented for most of the summer and occasionally uses it themselves in the fall and winter. She said she’s had mostly good experiences, which she credits in large part to finding a reliable cleaning crew — but great housekeepers can’t help with the initial screening process. Gleaves said they have had a television stolen out of their unit by a guest and have had some minor damage, though she said most guests take great care of their place. Being the mother of teenagers has likely helped her spot and screen out guests who might have done more damage.

“I do not rent to spring breakers, and that is clearly written on my VRBO page, but people have tried many different ways,” Gleaves said. “A kid told me his mom was coming with them but found out she had cancer right before. When I asked what type of cancer she had, I never received a response.”

In the heart of Seaside on Tupelo Street is a sprawling two-story cottage with sweeping porches, available on the vacation rental program of the Homeowners Collection, aptly named Sweet Retreat.

COURTESY Kurt Lischka/MoonCreekStudios.com

She said she received another inquiry from a young man who said he was coming into town for a church program with his nine college roommates. When Gleaves asked what church they were members of, he told her he wasn’t sure but would get back to her. He didn’t. Yet another prospective guest sent a request for 10 adults, and after Gleaves turned her down, the same person, using the same name and email address, sent a request claiming to be a mother traveling with her husband and two children.

“Needless to say, I declined,” Gleaves said.

Screening is a major service that management companies offer to owners. Maldonado, of ResortQuest, said that his company’s call center staff is trained to note details about people who call to make a reservation.

Up the spiral staircase is a stunning view of the town of Seaside from a private tower. Guests will gladly pay $6,853 to live the coastal lifestyle for a week during peak season for this hideaway. 

COURTESY KURT LISCHKA/MOONCREEKSTUDIOS.COM

Emerald Coast management companies all say that they screen guests a second time when the guests check in, which can take place either at the management company’s office or at the vacation home. However, properties along 30A and Destin aren’t as likely to attract the spring break crowd in the first place.

“We’re working with very nice properties, so the price point alone helps us keep out the party crowd,” Zeiset said.

Two years ago, some Seaside homeowners decided to create a third option: a hybrid of the self-managed and professionally managed models called Homeowners Collection. The nearly 50 owners who have joined to date paid $5,000 upfront, said Amy Wise-Coble, the general manager of Homeowners Collection. The company also charges a 20 percent management fee. Those fees allow the owners to both maintain control of their own home and have the convenience of a professional management company. For guests, Homeowners Collection handles the reservation process, provides concierge services and assigns a cottage host to help guests with any other needs.

“If the company makes a profit over the operating expenses, it will go back to the homeowners,” Wise-Coble said. “It’s a groundbreaking concept that could be duplicated in other communities. I think we’ll see more like this in the future.”

Emerald Coast property managers contacted for this story all said they advertise their homes in the markets where most of their guests come from — which are the same markets where most of their owners live: Atlanta, Nashville, Birmingham and Dallas. However, they all also said that most of their renters are repeat guests.

“Because we don’t have high-rise hotels here and we do have so many vacation rentals, we’ve been able to really promote this area as being great for families,” Dailey said. “It’s a tradition for many families throughout the Southeast to come here year after year.”

Maldonado said that ResortQuest, which manages more than 1,500 properties in the area, doesn’t use third-party websites to find bookings. However, other management companies say listing on third-party sites is essential for finding guests.

“Guests may not even realize that they’re booking with us,” Hamm said. “They’re looking on VRBO or Homeaway and get directed to one of our properties.”

Sealing the Deal

Once the decision to purchase a property has been made and a management plan is established, the process is fairly simple. An owner who plans to self-manage will need to get high-quality photographs of the interior and exterior, list the property on a website such as VRBO or Homeaway, and find housekeepers and possibly a handyman in the area. Gleaves said an owner who manages his or her own rental should expect to spend several hours each week updating the listing with rate information, responding to rental requests, confirming guests, collecting payments and managing housekeepers. An owner who lists with a management company won’t have to do any of these things — all of these tasks will be handled by the property manager.

Whether you self-manage or list with a property manager, the experts all say the home should be well-decorated and updated.

“Think of the kind of place you’d want to stay in as a vacationing guest and furnish your place accordingly,” Dailey said. “Guests tend to take better care of places that are furnished nicer.”

Ferguson said owners who update their Sandestin units tend to recoup the money they spent rather quickly because their units rent easily and more frequently.

But as vacation-home owner Bob Cherry, who lives in Nashville, noted, an immaculately decorated unit won’t rent well if it’s not in a location where people want to go.

“When it comes to property, what you’ve always heard is true: It’s location, location, location,” Cherry said about his Panama City Beach high-rise condo. “We bought in this area because we love it. Having spent almost 40 years of vacations along the Emerald Coast, it always feels like coming home to us, each and every time we visit.”