Vacation Rental Market Analysis: Gulf Shores & Orange Beach, AL

The Evolve Team
The Evolve Team
September 2, 2022

With 32 miles of beachfront coastline, turquoise waters, and a reputation for family-friendly fun, it’s no wonder tourism in Gulf Shores and Orange Beach has exploded in recent years. Alabama’s Gulf Coast recently saw record-breaking numbers with nearly 8 million visitors — a number local government, in large part, attributes to a growing base of loyal guests.

What’s more, vacation rentals have been a top accommodation choice for many of those visitors. It’s this eye-catching growth, the preference for private beach rentals, and the area’s budget-friendly inventory that make Gulf Shores and Orange Beach ideal places for scooping up an investment property.

To help you understand your income opportunity in this hot Gulf Coast area, we created a free, downloadable vacation rental market analysis. Inside you’ll find:

  • Rental income potential by property size
  • Average occupancy by property size
  • Average daily rate by property size
  • Average days booked in advance
  • Average length of stay
  • Vacation rental inventory by property size
  • Occupancy rate by month

The findings in this analysis are based on Evolve’s Gulf Shores and Orange Beach market averages in the last year, and provide a general baseline for performance potential. They’re designed to help inform smart buying decisions when investing in the Gulf Shores area.

Download Our Complete Gulf Shores & Orange Beach Vacation Rental Investment Analysis

Blue icon of a beach house with waves, stars and an umbrella

Why Gulf Shores & Orange Beach Are Great Places to Own Vacation Rental Property

As temperatures climb and waters warm in summer months, so do occupancy rates on Alabama’s Gulf Coast. A nonstop flurry of travelers come to town from May through July, be it for the annual Hangout Music Festival or just classic beach fun. This gives vacation rental owners huge income opportunities, as it’s possible to set higher daily rates and fill calendars up well in advance.

Since the area is especially popular among families, there’s also a big surge in guests around March for spring break. The abundance of family-friendly things to do and see (like Gulf State Park, mini golf courses, and the Alabama Gulf Coast Zoo) offer a great way to mix in some sand-free fun, and help owners sustain success even as peak season wanes.

But as interest in these areas continues to grow, our Real Estate Services (RES) team notes a rise in real estate prices. The median home value for properties hovers around $440,000 in Gulf Shores and $485,000 in Orange Beach, reflecting an approximate 25% increase over the last year alone. (That said, properties for sale do range in both size and price.) This makes Gulf Shores and Orange Beach hot markets — and ones investors should consider breaking into sooner rather than later.

Blue icon of a crystal ball with the words "Profit Prediction" inside with stars

How Much Money Can You Earn with a Gulf Shores or Orange Beach Vacation Rental?

To better understand what makes Gulf Shores and Orange Beach investment properties successful, it’s important to take a closer look at top-performers. Here are the factors to consider when evaluating your options.

Property Size

With large, multi-generational families accounting for a strong portion of Alabama’s Gulf Coast travelers, spacious homes tend to be most profitable. Five-bedroom properties earn the highest annual revenue and the most nights booked on average, with four-bedroom homes following closely behind.

If a sprawling home isn’t in the cards, never fear. Smaller Gulf Shores and Orange Beach condo investments are also hugely popular — not to mention quite plentiful, with over 14,000 condos operating as vacation rentals. What’s more: Evolve’s most-booked home in the area is a one-bedroom, reinforcing just how strong an investment of any size can be.

Property Location

Our Real Estate Services team says the best investment properties are as close to the beach as possible. Look for homes within walking distance of the shoreline to grab traveler attention, and prioritize true beachfront options to really maximize your earning potential. 

Since travelers are on vacation, convenience is king — and it’s important to remember that doesn’t just apply to beach access. Consider proximity to local restaurants as well, so your guests can just as easily enjoy a night out after a day in the sun. Many restaurants in the area are located along the Gulf Shores Parkway, so finding a home located close to the beach and this main strip provides added value.

Property Amenities

Since travel to Gulf Shores and Orange Beach peaks in the summer heat, our RES team says keeping guests cool is a top priority for vacation rental owners. So first and foremost, make sure you’re moderating indoor temperatures by equipping your vacation rental with air conditioning.

Pools are also a highly searched-for perk (whether in a private outdoor space or a condo community), and are especially important to consider when looking at properties that aren’t beachfront. Granting travelers access to a refreshing body of water steps from their door will go a long way toward securing booking after booking. 

Don’t forget to offer amenities that cater to the area’s top travelers, either. Decks and balconies with ocean views are a major selling point for beach lovers, as are key supplies like beach chairs, umbrellas, and towels. Kid-friendly amenities like beach toys, floaties, an entertainment system, or a game room make life a lot breezier for parents, too.

Of course, certain amenities are always valuable, whether you opt for a standalone home with private perks or favor a Gulf Shores or Orange Beach condo investment with a shared pool and game room. Providing a welcome book, thoughtful gifts, cozy furnishings, and well-stocked essentials can help you make a great home exceptional.

Download Our Full Gulf Shores & Orange Beach Vacation Rental Market Analysis

As a major hub for vacationing families and beach enthusiasts — not to mention a strong base of loyal, returning guests — Gulf Shores and Orange Beach have major vacation rental profit potential and are well worth an investor’s consideration.

To discover what your investment future might have in store, download our free Gulf Shores & Orange Beach Vacation Rental Investment Market Analysis today

Inside you’ll find:

  • Average daily rate by property size 
  • Expected seasonality in vacation rental demand
  • Average length of stay in high and low seasons
  • Inventory breakdown based on property size

Choosing a Gulf Shores or Orange Beach investment property shouldn’t leave you feeling sunburnt and stormy. Use our report to help steer your vacation rental journey toward clear skies and calm waters.

Get Your Vacation Rental Performance Report

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