Host, Christine Karpinski: I'm Christine Karpinski. Thank you for listening to the How to Rent Vacation Properties by Owner Podcast.

And today's guest is Shannyn Stevenson. Shannyn is a real estate agent down along the Gulf Coast of Florida. Her offices are located in Destin, Florida. And she's joining us today to talk a little bit about the Destin, Florida market, and the Gulf Coast Market. So, Shannyn has been a real estate agent in that area over 10 years, and she knows a lot about the area. She's a really good resource if you're a first time buyer, or if you are an investor who's invested in that area before, and are looking for somebody that's extremely knowledgeable about the area. Thank you for joining us, Shannyn.

Guest, Shannyn Stevenson: Thank you.

Christine: And now can you tell us a little bit more about how people would get a hold of you if they're listening, they want to contact you, and maybe learn more, or look at some listings, or naturally come down and look at properties? Can you tell people how to get a hold of you?

Shannyn: Absolutely. You can go and view all the MLS Listings, or every property for sale along the Coast at www.KnowTheGulfCoast.com, or if you'd like to call me directly, you can call me at our toll free number at 1 800 596 7006.

Christine: OK, again that's 1 800 596 7006. Thanks Shannyn. OK, let's get right into it. The Gulf Coast of Florida's been a really popular area within the last-- I'd say probably-- 5 10 years. And before that, it was sort of a little secret area that was absolutely gorgeous and not as many people knew about it. Over the past 5 10 years the Gulf Coast has really boomed. And can you tell me first of all, what would somebody coming to your area would look for in a property?

Shannyn: The people that I deal with are truly investors that are looking to generate income-- make some money. You know, make some money off of investments that they're pursuing. Generally looking for something that's either a condo that generates income, or a house that generates income.

But, anything that's at least very close to the beach. Most people's ultimate goal here is to retire and they can't always buy their dream property first off. So, they start little and they move up. And really anything that's close to the beach that you can get [is good], because most people come here for the white sand. And properties closest to the white sand generate the most income.

Christine: And Destin, just to be clear it's on the northern part of Florida, the Gulf Coast, it's on the Panhandle of Florida. Can you tell us what the season for rentals is in that area?

Shannyn: We have our "Snowbird season." A lot of people from the north come down between December, January, February and March, and they stay for the all three or four months. And then the toughest season is when the "spring breakers" come in. They come in the first week of April, and that is just a crazy week. We've got business packed, which is good, because that's generating income for our investors who own rental property.

Christine: Now you say, "Crazy week." Does that mean it's a bunch of college spring breakers?

Shannyn: Oh no, absolutely not it's truly families. This is definitely a family location. A lot of the college students tend to go towards Panama City, which is a great area for them. But, we have a lot of younger families with young children who are trying to get in before the summer. But no, there's definitely not a whole lot of college students.

Christine: OK.
Shannyn: If there are college students, they're definitely with their parents. It's a pretty safe area regarding rentals, they don't let a lot of college students rent on their own.

Christine: Right, right excellent. Now, and then the peak season would be when?

Shannyn: Let's see, the first week of April's pretty busy, and continues on. It continues to stay pretty busy until April, May, June. The first week in June gets really busy. July's really busy. August- it continues. September it slows down a little bit. A lot of the owners like to come down in September, because it is quiet enough to where they can really relax and enjoy their property- yet it's still pretty gorgeous.

A lot of people who don't have children and don't need to come out during the summer when school's out come down during September because they feel a little bit more privacy- and it's still really warm. September's a really good month.

In October and November, it slows down quite a bit. But, then you go right back into December, and you've got your "snowbirds" again.

Christine: Excellent.

Shannyn: Getting busier year around now.

Christine: Right. So, it's becoming more a year round rental area?

Shannyn: It really is.

Christine: Absolutely. It's a nice area. I do own in Destin, and in Panama City, so I know the market pretty well. And it's funny: when I first started I think I only rented 20 weeks the first year. And now I'm up to renting 30 35 weeks a year, so it's really grown a lot over the past few years a lot more people are going to the area.

Now, when you're looking for properties in that area, is it better to buy a condo or is it better to buy a single family dwelling? I mean, I own in the mountains of Tennessee, and that's an area where I'd say you're probably better off buying a single family dwelling. Are there any distinguishing factors between those two in your area?

Shannyn: Well houses and condos both generate very strong rental income. I think it depends on the person's interest. A lot of people like to do gulf front, true gulf front, and it's all about what they can afford as well. One bedroom gulf fronts are ideal. They're not very expensive, like a two bedroom, and they still generate very strong rental income.

Christine: Really?

Shannyn: But now even your houses if you can get a house within walking distance of the beach, they still also generate very strong rental income. You are going to spend a little bit more, but you are going to accommodate a different type of clientele, meaning maybe more families. Maybe a family who has a lot of kids or has a mother in law they want to bring down with them. We do have a lot of that, so houses generate just as strong as gulf front condos.

Christine: Interesting, interesting. So it doesn't really matter: condo or single family dwelling, they rent pretty much around the same?

Shannyn: Yes, the outcome is the same as far as what it grosses in gross rental income.

Christine: Interesting.

Shannyn: You get a gulf front condo that is one bedroom and you pay $425, 000. It generates $30, 000 in gross rental income. You get a house, it has to be within a block of the beach, though-- you don't want to go further than a block. For a three bedroom house you'd probably pay about $600, 000 and generate about $30,000 in gross rental income.

Christine: OK. So with that scenario, if you are a strict investor just looking for return on investment, perhaps buying that beach front condo, even if it's just a one bedroom, might be better. It costs less and it makes the same amount of rental income as that house maybe a block off the beach that is much bigger. I guess there are tradeoffs to both because with the condo you would have condo association dues, and with the single family dwelling you would have to maintain the exterior on your own. That probably is a wash, wouldn't you say?

Shannyn: Yes, you're absolutely right. I have a lot of clients who come in here saying, “I want a house, I want it close to the beach. But, we can't afford it. It's not really generating enough income to really help me pay the mortgage. We might need to downsize and start smaller; start with gulf front.” They get their gulf front, they generate income, and they're very happy with it. Sometimes they just end up upgrading to a two bedroom! A lot of people come down here that are not your true investors but want to get into the investment game. They're thinking that size is what matters, and that's not always the case. What matters is how close you can get to the beach.

Christine: Interesting. Now what if you bought a one bedroom-- maybe off the beach-- say across from the beach? What would the price of that type of condo be?

Shannyn: A one bedroom about 700 square feet would be about $300,000.

Christine: OK. So you can buy off the beach for a little bit less.

Shannyn: Right. If you can get one with a great view, it does generate income. And what people forget is that it';s not how much you charge, it's how often you can get that property rented.

Christine: Right! That totally makes sense. For instance, if you have a home say it's a six bedroom home, and maybe it's even directly on the beach-- certainly during the peak season it would be rented, but if it doesn't rent during the off season as much because it's hard to get a huge group of people that would rent a six bedroom place. Maybe a smaller place would actually rent more often. That does make sense.

Christine: Now is there anything that a prospective buyer in that area would need to watch out for during the buying process? Are there places in your area that restrict vacation rentals? I remember a few years back there was a part of Crystal Beach where they said no vacation rentals at all. You couldn't rent on a nightly or weakly basis; does that still exist anywhere?

Shannyn: They are not enforcing that quite as much anymore because it has become such an important part of our area. They're becoming a lot more relaxed with that. People are accepting the fact that we thrive on having those rentals. Our area grows because of all of the people who come down and rent here. They make us money; they make the town money. It really benefits a lot of the owners who also live here, and I think they are becoming aware of that.

However, there are a few condos who still restrict rentals, and that's ok. We do need to have that because there are some people who want to come here, to be by themselves, have a condo on the beach and want to be left alone. The quality of the condo is still very nice, and it helps everybody around them.

Christine: I guess that would be for permanent residents, maybe like yourself, who have children and you don't want to be in an area where you have new neighbors every week.

Shannyn: Right.

Christine: I guess that makes sense! So you're saying that a lot of the properties there are rentals and have been rentals for a long time. What if you purchase a property with rentals on the books. Say I buy something right now and the owner has six or eight weeks booked, and a couple of those weeks are weeks that I want to use. Do I have to honor those bookings?

Shannyn: Every situation is different. It depends on the seller you are dealing with or the listing you are dealing with, and the rental management company.

Christine: So there are no laws? Because in certain areas there are laws that say if there are rentals on the books you absolutely have to honor those rentals, even if the property is sold to a new owner.

Shannyn: No, no! Not necessarily down here; it's not a law. Generally though a lot of investors would like to continue having those rentals, but you don't have to. The person who buys the property might have their own idea what they want to do with that property. Once it's sold it's the owner's property, and they make the decisions from here on out. And really, there are so many rental properties down here, it's not hard to take those bookings and put them somewhere else, because certainly some other owner would love to have those bookers in their rental.

Christine: Right, so it's like hand them off. Don't leave those poor renters out in the cold!

Shannyn: Right! And they won't. They'll definitely have a property just as nice as they were going to have when they were going to come down here.

Christine: Well that wraps up this episode of the How to Rent Vacation Properties by Owner podcast.

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