This is something I've looked at myself - in Orange Beach. But I haven't gotten too far into it.

I do have 6 clients that own condos on the Gulf Coast. 5 of them are married couples that each own a single condo or beachhouse in various spots between Gulf Shores and Seaside. The 6th are two brothers that own 7 condos in and around Port Aransas, TX.

The 5 married clients: each couple has a wealthy breadwinner, 3 of them are doctors and 2 are high-level attorneys, all of them are in SE Louisiana. None of them truly look at the condo as an investment. They all love going to the beach and using the unit personally (they each go personally or allow family to go at least 30 days a year, at least half of which is during winter). They all were spending lots of money renting stuff, and just decided to buy. None of them are really looking at making any serious money off it it. None of them cash flow positive, they cash flow negative between 1K and 5K a year. But... they are personally using the properties so that is a replacement of cost they would pay to rent. All of them are subject to vacation property rules for tax, so, basically, they get to write off the personal use of the mortgage interest and property taxes as a second home, and as a rental property, they show no taxable income.

The other one is a different story. Two brothers who about 10 years ago sold a construction company they co-owned and they each made about 15 million off the sale. All 7 condos they own in Port Aransas are truly investment. They spend 10 months a year in Port Aransas in their personal houses down there, and 2 months a year in San Antonio. They are retired. They handle everything themselves - they do not use a rental agency. They are both handy so they do ALL the maintenance on the properties themselves. They are located in all different complexes - no more than one per complex. They do hire a cleaning crew - they use same crew for all properties.

Each property cash flows approx 1000-1500 per year. The cash flow is very variable month to month. Each property is held in a seperate LLC. With depreciation they generate a taxable loss. However, they can use these losses to shelter some income coming from other passive investments they have.

I'm still not sure they are really making a wise investment, but they do it more as a "hobby".