Gulf Shores and Orange Beach Investment Property Calculator

⚡ Quick Market Presets:
1

Property Tier & Revenue Projection

Select location and bedrooms to load coastal benchmark numbers

Market Benchmarks
$300k - $2.5M
$
$55K – $78K/yr
$
ℹ️
Local Lodging Tax (16% in City Limits): Gulf Shores and Orange Beach currently publish a 16% lodging-tax rate inside their city limits. Collection and remittance responsibilities depend on the booking channel and management arrangement, so confirm the exact address and filing setup before operating.
2

Operating Expenses & Management

Customize management, HOA dues, utilities, and insurance

Total OpEx $24,120 / yr
0% ($0/yr)
$9,600 / yr
$

Includes building master insurance, reserves, water, trash & amenities.

$341 / mo
$

Baldwin County non-homestead investment rate (~0.70%). Auto-scales with price (editable).

$150 / mo
$

Interior walls-in, contents & loss of rental income.

$3,600 / yr
$

Power/cooling, Wi-Fi, streaming & cable.

~3.5% of Rent
$

Wear & tear, HVAC service, linens & supplies.

Guest Pass-Through ($0)
In Gulf Shores/Orange Beach STRs, guests pay cleaning fees directly on booking (~$150–$325/turn), creating a net-zero cost to host.
3

Mortgage & Loan Financing

Compare 10% Down Second Home, 20% Investment & DSCR loans

Monthly P&I $3,446 / mo
$117,000
%
30-Yr Fixed
%
Term
Estimated Closing Costs & Prepaids (~3%): $17,550
Total Cash Required: $134,550
Bottom Line Pro-Forma

Estimated Profit / Loss

Positive Cash Flow
Annual Net Cash Flow
+$5,420
After all expenses & debt
Monthly Cash Flow
+$452/mo
Net in your pocket
Cash-on-Cash 4.03%
Cap Rate (NOI) 7.16%
Operating DSCR 1.32x
Gross Yield 11.28%
Gross Rental Income: $66,000
- Total Operating Expenses: -$24,120
= Net Operating Income (NOI): $41,880
- Annual Mortgage P&I: -$36,460
= Net Annual Profit / Loss: +$5,420
Revenue Allocation:
Debt Mgmt HOA/Tax Net

📈 5-Year Total Return Model 3% Coastal Appreciation

5-Year Cumulative Cash Flow: $27,100
5-Year Principal Loan Paydown: $38,450
5-Year Property Appreciation: $93,170
Total 5-Year Wealth Generated: $158,720
Estimated Total Return on Initial Cash: 118%
Educational estimate — CPA review required

Potential Cost-Segregation & Depreciation Timing

See how moving some eligible building components to shorter tax lives could accelerate depreciation. This is not a tax credit, tax advice, or guaranteed savings.

Estimate +

Why both periods are shown: Short stays do not automatically determine the building's recovery period. A property meeting the residential-rental definition may use 27.5 years, while qualifying hotel, motel, or other transient-lodging property may use 39 years. An average guest stay of 7 days or less is a separate passive-activity rule and does not by itself select 39 years. Have a CPA classify the property.

The 15% land and 20% short-life allocations are editable screening assumptions, not conclusions from the MLS or a cost-segregation study. The illustration assumes eligible short-life property is acquired and placed in service after January 19, 2025 and qualifies for the current 100% federal bonus-depreciation rule.

Estimated depreciable building basis $0
Potential short-life basis from study $0
Ordinary annual depreciation comparison $0 Comparing 27.5- and 39-year building treatment
Potential additional first-year depreciation $0 Range above both simplified ordinary comparisons
Illustrative federal tax timing effect $0
Additional-depreciation range × entered marginal rate

This is not a refund, credit, or guaranteed tax savings. It is only an illustration of possible timing. Passive-loss, at-risk, material-participation, personal-use, income, placed-in-service, recapture, state-tax, and other rules may reduce, suspend, defer, or reverse the benefit.

Other rental-property items to review with a tax professional
• Mortgage interest• Property taxes• Insurance • HOA and management• Utilities and cleaning• Repairs vs. improvements • Supplies and furnishings• Professional fees• Travel and mileage

An expense is not automatically deductible because it appears here. Eligibility, documentation, rental-versus-personal allocation, capitalization rules, and deduction limits must be determined for the owner’s facts.

📘 Deep Dive Guide: Learn how cost segregation, bonus depreciation, the STR 100-hour rule, and 14 write-offs work together. Read Tax Strategy Guide →
Official educational references: IRS Publication 527, IRS Publication 946, IRS Publication 925, and the IRS Cost Segregation Audit Technique Guide.
Free Pro-Forma & Rate Quote

Get a Custom Pro-Forma for Any Condo

Have Dave Davis confirm current loan terms and Kelly Davis request the available unit-level rental records and association documents.

Want to discuss your financing options right now?

Schedule a 15-Min Clarity Call with Dave
Financing Breakdown

Comparing Loan Programs for Coastal Vacation Rentals

Understanding the underwriting trade-offs between 10% Down Second Home financing, 20% Down Conventional Investment, and DSCR loans.

Loan Feature 10% Down Second Home 20% Down Investment DSCR Investor Loan
Minimum Down Payment 10% Down 15% - 20% Down 20% - 25% Down
Income / Tax Doc Qualification W-2, Tax Returns & DTI W-2, Tax Returns & DTI Often property-income focused; credit, assets, and program documents still apply
Rental vs Personal Use Rules Must satisfy the lender's second-home occupancy and rental-use rules 100% Investment / No Occupancy Rules 100% Investment / No Occupancy Rules
LLC Vesting Permitted Typically individual ownership at closing; confirm with lender and counsel Typically individual ownership at closing; confirm with lender and counsel Some programs allow LLC vesting; confirm before applying
Property Limit Subject to borrower, occupancy, and program rules Subject to financed-property and lender limits Portfolio rules vary by lender
Interest Rates Enter a current quoted rate above; pricing changes with market and borrower profile Enter a current quoted rate above; pricing changes with market and borrower profile Enter a current lender quote; DSCR pricing and points vary by program
Best Suited For Buyers who want the beach condo for family use + rental cash flow when away. W-2 wage earners with low DTI looking for lowest rate on pure rentals. Self-employed, business owners & active investors scaling a portfolio quickly.
Coastal Due Diligence

Gulf Shores & Orange Beach Investor FAQs

Key details on lodging taxes, STR zoning, condo HOA dues, and insurance before submitting an offer.

How do lodging taxes work in Gulf Shores and Orange Beach? ▼
Properties inside the city limits of Gulf Shores and Orange Beach are subject to a 16% total lodging tax (4% Alabama State Lodging Tax, 2% Baldwin County Lodging Tax, and 10% Municipal Lodging Tax). In unincorporated Fort Morgan, the total tax is 6% (State + County).

Critical Note for Pro-Formas: A booking platform or property manager may collect and remit some lodging taxes, but the owner remains responsible for confirming that the correct taxes, licenses, and filings are handled for the exact address. This calculator does not subtract lodging tax from owner gross revenue because it is normally charged to the guest; verify the actual rental statement format.
What do condo HOA dues cover, and why are they $600–$1,200/mo? ▼
Coastal Alabama condo association dues include substantial operating items that single-family home buyers pay out-of-pocket:
  • Master Hazard & Windstorm Insurance: Insures the entire exterior concrete and roof structure.
  • Master Flood Insurance: Covers building foundation and common structural components.
  • Reserves & Exterior Maintenance: Elevators, exterior paint/waterproofing, boardwalks, roofs, and balconies.
  • Resort Amenities: Indoor/outdoor pools, lazy rivers, hot tubs, tennis courts, and fitness centers.
  • Utilities: Water, sewer, trash, Wi-Fi internet, and basic cable in the majority of complexes.
Owners commonly need an HO-6 interior policy, but coverage, deductibles, loss-assessment protection, wind exposure, and premium vary by unit and master policy. Obtain a written quote before relying on the calculator.
What is a DSCR Loan and how do coastal lenders qualify short-term rentals? ▼
A DSCR (Debt Service Coverage Ratio) loan generally places more emphasis on the subject property's qualifying rent than conventional debt-to-income underwriting. Credit, assets, reserves, appraisal support, documentation, and lender rules can still apply.

Lender formulas vary: some products compare qualifying monthly rent with PITIA, while the property analysis on this page shows operating NOI divided by annual principal-and-interest debt service. Ask the lender which rent source, expense factor, and minimum ratio will be used for the actual loan.
Should I self-manage (Airbnb/VRBO) or hire a local 20% management company? ▼
Self-Management (0% Fee): Using direct Airbnb/VRBO platforms, dynamic pricing tools (PriceLabs), and local turnover cleaners can save $10,000–$25,000/yr in fees. Best for owners willing to handle guest messaging, review screening, and contractor dispatching.

Full-Service Local Management (18%–20% Fee): Local companies provide on-island 24/7 maintenance, linen service, keyless lock management, hurricane storm prep, local marketing, and automated tax remittance. It turns the asset into a completely passive investment.

Explore Live Active Investment Condos For Sale

Search Gulf Shores and Orange Beach condo listings with published rental signals and benchmark projections that still require verification.

Overview
All Rental Income Condos
Explore all 240+ complexes with rental intelligence.
Premium Tier
Luxury Condos ($800k+)
High-gross resort towers generating $80k–$200k+/yr.
Workhorse Tier
Mid-Tier ($450k–$800k)
Top cash-flowing 2BR/3BR direct beachfront units.
High ROI
Budget Under $450k
Accessible price points with 12%–17% gross ROI.

Important Estimates & Licensing Disclosure

Educational estimates only: Property, rental, HOA, tax, insurance, management, maintenance, utility, assessment, financing, appreciation, cash-flow, DSCR, and return figures are screening estimates based on available MLS listing data, maintained rental signals, broad market benchmarks, and assumptions entered on this page. Source data may be incomplete, outdated, or inaccurate.

Nothing is guaranteed: Conservative, expected, and upside results are sensitivity scenarios—not forecasts or promises. Published or past rental performance does not guarantee future income, occupancy, expenses, property value, financing approval, or investment returns. Verify unit-level rental statements, association documents, dues, reserves, assessments, insurance and tax quotes, short-term-rental rules, and all loan terms before relying on any result or making an offer.

Not professional or lending advice: This page is not an appraisal, investment recommendation, tax advice, legal advice, official Loan Estimate, approval, or commitment to lend. Tax illustrations do not establish tax basis, whether a building is 27.5-year residential rental or 39-year transient/nonresidential property, asset classifications, eligibility, deductions, refunds, or savings. A qualified tax professional and, when appropriate, a qualified cost-segregation provider must evaluate the owner, property, study, records, rental operation, guest stays, personal use, participation, and current federal and state law. Rates, down payments, payments, and loan-program examples are illustrative and may change; actual terms depend on credit, income, assets, occupancy, appraisal, property eligibility, program rules, and lender approval.

Mortgage licensing: Dave Davis, Mortgage Loan Originator, NMLS #1904558. Sponsored by Barrett Financial Group, L.L.C., NMLS #181106, Alabama License #22977. Equal Housing Opportunity. Verify licensing through NMLS Consumer Access.

Meet the Experts

We didn't just move here - we built our lives here. And now we help other families do the same.

Kelly Davis
Team Lead

Kelly Davis

Associate Broker & Team Lead

Kelly is the heart and engine of Big Beach AL Team. She pairs coastal market knowledge with creative marketing and helps buyers and sellers make confident moves on the Gulf Coast.

Book a Call Email Kelly
Dave Davis
The Numbers Guy

Dave Davis

Lending Specialist & Realtor

Dave brings the financing brain to the table, helping buyers understand payments, carrying costs, rental projections, and the real numbers behind a beach property before they write an offer.

Book a Call Email Dave
Kerri Nicketta
Buyer's Agent

Kerri Nicketta

Expert Buyer Specialist & Lead Buyer's Agent

Kerri is the team's go-getter for showings, tours, and buyer follow-through. She keeps the process moving and helps clients compare properties with clear, on-the-ground context.

Book a Call Email Kerri