Sunday, August 05, 2007

Gulf Shores - Resort Rentals Robust

Published by the Mobile Press Register
Resort rentals robust
Sunday, August 05, 2007
By KATHY JUMPERReal Estate Editor

Today, Marie Curren is likely operating the elevators at the 72-unit Phoenix IV condominium in Gulf Shores.
Her real job is marketing manager for Brett-Robinson, but this is one of the busiest check-in days for the real estate company's 1,943 rental units. There are 1,000 families arriving at the firm's 16 condo complexes to spend the last week at the beach before schools start.
"What's interesting is that we have 890 back-to-backs," she said. That means a total of 890 units will have guests checking out at 11 a.m., and guests arriving to stay in those units at 3 p.m.
To keep the cleaning crews on schedule and sane, and make sure guests are happy, all of Brett-Robinson's managers are pitching in to make the day go smoothly.
"We have a 97 percent occupancy, and that's about as good as you can get," Curren said.
Though condo sales have been slow, the resort rental market has seen occupancy rates in the high 90s this summer, according to rental managers.
Taxable lodging rentals reached $57.1 million for spring 2007, a $1.3 million increase over 2004's $55.8 million during the same months, according to the Alabama Gulf Coast Convention and Visitors Bureau's June report. The taxable lodging rentals in June were 30 percent higher than in the same month last year, and up 24 percent over June 2004, which was a record-setting year, said Herb Malone, president of the Gulf Coast CVB.
"That gives you an idea of what kind of summer we're having," he said. "We expect the July numbers to be even better. People are coming down in droves."
"If you can't sell it, rent it" has been a mantra for owners and Realtors since Hurricane Katrina hit two years ago. The for-sale condo inventory has averaged 3,000 units for more than a year. While renting won't pay the mortgage, it will offset some costs, agents say.
"People ask us about rental histories all the time, and we tell them the past is a good indicator of the future," said Buzz Farias of the Pro Team at REMAX of Gulf Shores. "But nobody has a guarantee."
How much rental income a condo unit will generate depends on several factors. The first two are location -- or is the unit directly on the beach -- and how much it costs to rent for a week.
"Renters want as many bells and whistles they can get for as cheap as they can get it," Farias said.
The rental income projections are based on how much the unit costs, as well as the fees such as telephone, association dues, property taxes, content
insurance and management fees, he said.
Meyer Real Estate's sales team is "very conservative" with its rental income projections, according to Sarah Kuzma of Meyer in Gulf Shores, which manages more than 2,000 condos and some 300 beach houses on the Alabama coast and Perdido Key, Fla.
The rental estimates are based on 10 weeks of revenue in the summer, three weeks in the spring, two weeks in the fall and a month or more in the winter or snowbird season, according to Kuzma. The rental rates depend on the season, with peak summer time commanding the highest rates, agents say.
For example, a two-bedroom, two-bath Gulf-front unit at Island Royale in Gulf Shores rents for $1,590 a week during the summer, according to Meyer. The unit would bring in $25,160 a year in rental revenues as a conservative estimate, according to Kuzma.
Across the street from the beach, at the newly opened Crystal Tower, a two-bedroom, two-bath unit rents for $1,380 a week in the summer. The yearly rental revenues would be about $19,406, according to Kuzma. The new condo tower has an air conditioned walkway to the beach and a pool and gazebo on the sand.
Brett-Robinson's rental staff, like many of the large firms at the beach, work on a commission basis, according to Curren. "Our pledge is that we will generate you as much income as we can."
Rental activity will drop off in August and pick back up for the Labor Day weekend, which ends this year on Sept. 3, according to Curren. Still, the Thunder on the Gulf boat race Aug. 18 and 19 has most of the rooms along the race course booked, she said. The National Shrimp Festival in Gulf Shores in October will bring crowds to the Gulf, followed by the arrival of the snowbirds in January and February.
The snowbird season could drop from three-month stays to one month in the near future, Kuzma said. "The generation that will replace current travelers will not stay put for three months at a time," she said. "We think it will be one month, if there are a lot of activities."
There are 1,636 hotel rooms and 13,169 condo units available for lease in Gulf Shores, Fort Morgan and Orange Beach, according to the CVB. Another 147 hotel rooms and 398 condo units are expected to come on line by the end of the year, Malone said.


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