Thinking about writing an offer on a Destin condo and want to see the real numbers first? You are smart to ask. In our market, seasonality, HOA fees, insurance, and local rules can swing returns more than the purchase price. In this post, you will learn exactly what to collect, how to model income and expenses by month, and how to spot the HOA and regulatory items that truly affect net yield. Let’s dive in.
Why Destin condo ROI needs a custom model
Destin is a coastal vacation market shaped by beach tourism and short-term rentals. Demand peaks in late spring and summer, with shoulder season bumps around spring break and fall weekends. Winter months often show much lower nightly rates and occupancy.
Because of this seasonality, you should model cash flow by month, not by annual averages. A monthly approach captures the swings in ADR and occupancy so you can see when cash can get tight. Use a structure like: monthly ADR times nights available times occupancy percentage to estimate gross revenue for each month.
For data, pull unit or building trends from short-term rental analytics. Tools like AirDNA can help you benchmark ADR, occupancy, and seasonality for Destin so your assumptions are grounded in reality.
What to include in your ROI and fee analysis
Income inputs to collect
- Historical monthly rental revenue for the last 2 to 3 years, if available.
- ADR and occupancy by month, plus nights available per month.
- Comparable listings and booking calendars from major platforms to verify rates and demand.
- Any add-on revenue, such as pet, parking, or storage fees.
Be conservative when translating listing rates into actual performance. Hosts can list high and book low. Historical calendars and third-party analytics are more reliable than asking rates.
HOA and assessment items that move the needle
HOA fees flow straight through to NOI. Ask for the current budget, the last 3 to 5 years of financials, the reserve study, meeting minutes, insurance certificates, and CC&Rs with rental rules. Confirm which utilities and services are included in dues and which are billed to owners.
Pay close attention to reserves, special assessments, and planned capital projects. Track dates, amounts, purpose, and payment terms for any recent or pending assessments. Review the historical pattern of assessments over 5 to 10 years and the master policy deductible for wind or hurricane events. If reserves are thin, include a special assessment line or a per-unit reserve surcharge in your model.
Operating costs to budget accurately
- HOA dues, and what those dues include.
- Property taxes at a non-homestead rate. Use Okaloosa County Property Appraiser records to understand assessed value and prior tax bills.
- Insurance, including hazard and flood, and any wind or hurricane deductibles.
- Utilities you will pay directly, such as electric, gas, internet, or cable if not included in HOA.
- Property management fees and booking platform fees.
- Maintenance, repairs, and replacement reserves for larger items.
- Cleaning costs and any between-stay expenses.
- A line for potential special assessments.
Regulatory and tax checks that affect net returns
Confirm short-term rental permissibility in the condo’s CC&Rs and with the city and county. Review Destin’s current vacation rental rules so your plan aligns with local code.
Short-term rental operators must collect and remit state sales tax and local tourist development taxes. Review Florida Department of Revenue guidance on short-term rental taxes and confirm local procedures with Okaloosa County. These taxes typically pass through to guests, but you will need proper bookkeeping and compliance.
Insurance and hazard exposures to price correctly
Destin condos face flood and wind risk. Check the FEMA map for your parcel to see if the property sits in a high-risk flood zone that may require specific flood coverage. Start with the FEMA Flood Map Service Center to understand zone and elevation factors.
For wind and hurricane coverage, premiums and deductibles can be meaningful. Review the association’s master policy and price interior and contents coverage as needed. For market context and options, see the Florida Office of Insurance Regulation and Citizens Property Insurance Corporation.
How to model cash flow the right way
Build a 12-month schedule first, then roll up to annual totals. This makes seasonality visible and helps you test different scenarios.
Core steps:
- Revenue by month
- Monthly gross revenue = ADR by month times nights available times occupancy percent.
- Add any other income.
- Effective gross income
- EGI = Gross revenue minus vacancy or collection loss, if not already captured in occupancy.
- Operating expenses
- Include HOA, taxes, insurance, utilities, management and platform fees, maintenance, reserves, cleaning, and projected assessments.
- Profitability metrics
- Net Operating Income = EGI minus operating expenses.
- Cap rate = NOI divided by purchase price.
- Cash-on-cash return = Annual pre-tax cash flow after debt service divided by total cash invested.
- Break-even occupancy = (Operating expenses + annual debt service) divided by (ADR times 365 times average nightly yield).
- Scenarios
- Run conservative, base, and optimistic cases. Test ADR down 10 to 20 percent, occupancy down 10 points, an unexpected special assessment, and insurance up 20 to 50 percent.
Critical HOA questions to protect yield
- Are reserves fully funded, and what is the current reserve balance relative to the study’s recommendation?
- What special assessments have been levied in the last 5 to 10 years, and are any planned or pending now?
- What is included in monthly dues, and what is billed to owners separately?
- What are the master insurance coverage and wind or hurricane deductibles, and what falls to individual owners?
- Are there rental restrictions such as minimum stay lengths, seasonal blackout periods, or required on-site management?
- Are there transfer fees, prorated assessments, or rental registrations required at sale?
- What is the current owner delinquency rate on dues, and is there any pending litigation?
Due-diligence checklist for a complete package
Request these documents from the seller, HOA, listing agent, or manager:
- HOA: current budget, reserve study, 3 to 5 years of financials, board and finance minutes, CC&Rs, rental rules, insurance declarations, planned capital projects and assessment history, owner delinquency report.
- Rental history: monthly gross revenue for 2 to 3 years, booking calendars, ADR by month, occupancy percent, cleaning fee schedule, representative guest reviews.
- Unit-level: last 12 months of utility bills, maintenance invoices, appliance ages and warranties, floor plan or unit map, any deed restrictions.
- Taxes and title: latest tax bill and assessment history, title exceptions.
- Insurance: HOA master policy, wind or hurricane deductible details, flood zone certificate and elevation data.
Common pitfalls and how to avoid them
- Modeling with annual averages instead of monthly seasonality. Use 12-month ADR and occupancy to avoid off-season surprises.
- Ignoring reserve studies or assessment history. Price in the risk of future assessments.
- Underestimating insurance and flood premiums. Confirm quotes early with a coastal-experienced broker.
- Assuming STR is allowed. Verify CC&Rs and local code before counting on vacation rental income.
- Relying on listing rates. Use historical bookings and third-party analytics for realistic ADR and occupancy.
Your next steps and how we help
If you are serious about a specific condo, start with documents and data. Ask the seller or HOA for budgets, financials, reserve studies, insurance details, rental history, and utility bills. Pull seasonality and occupancy trends from a trusted STR analytics source.
We build a clear monthly model that shows base, conservative, and optimistic outcomes, then pair it with practical next steps for offer strategy. We also flag HOA and regulatory items that may change your net returns, including taxes, insurance, and any special assessment exposure.
Ready for a tailored Destin Condo ROI and Fee Analysis that reflects how this market actually performs? Reach out to Randy Carroll for a private consultation.
FAQs
What is included in a Destin condo ROI and fee analysis?
- A monthly revenue model using ADR and occupancy by month, a detailed expense breakdown with HOA and insurance, regulatory and tax checks, and cap rate and cash-on-cash metrics.
How do HOA fees and special assessments impact returns on Destin condos?
- HOA dues reduce NOI directly, and special assessments create cash shocks, so include both in your model and review the reserve study, budgets, and assessment history to gauge true risk.
What taxes apply to short-term rentals in Destin, Florida?
- Short-term rentals generally require collection and remittance of state sales tax and local tourist development taxes, so review Florida Department of Revenue guidance and confirm local procedures with Okaloosa County.
Do I need flood or wind insurance for a Destin condo investment?
- Many coastal condos face flood and wind exposure, so check parcel risk at the FEMA Flood Map Service Center and review the condo’s master policy and deductibles to price your coverage correctly.
Where can I find reliable ADR and occupancy data for Destin short-term rentals?
- Use third-party STR analytics such as AirDNA and verify with historical booking calendars and management reports for the unit or building.
How do I estimate non-homestead property taxes for a Destin condo?
- Pull assessed value and prior tax bills from the Okaloosa County Property Appraiser and model without homestead exemptions, then apply reasonable assumptions for reassessment.
What local rules should I check before relying on vacation rental income?
- Confirm STR permissibility and any minimum stay or occupancy limits in the condo’s CC&Rs and review City of Destin vacation rental information for current municipal requirements.
