Thinking about buying a vacation rental in Destin but not sure where to start? You are not alone. Between local rules, taxes, seasonality, and management choices, there is a lot to unpack before you make an offer. In this guide, you will learn the key short-term rental rules, what to verify before you buy, and how to model ROI with confidence. Let’s dive in.
Destin STR rules to verify first
Understanding where your property sits on the map matters. Destin properties inside city limits follow City of Destin rules, while homes in unincorporated areas follow Okaloosa County rules. Nearby Miramar Beach often falls under Walton County. Each jurisdiction may set different requirements for short-term rentals under 30 days, so confirm the exact parcel location and its governing body before you run numbers.
Typical STR requirements in this area
Local governments commonly require several items for short-term rentals. Confirm the specifics for your address:
- Registration or permit, often with a business tax receipt.
- A designated local contact who is reachable 24/7 for complaints and emergencies.
- Safety standards, such as smoke detectors, egress, fire extinguishers, and occupancy limits.
- Parking and occupancy rules based on bedrooms or property size.
- Advertising and signage rules, including displaying a permit number on listings.
- Noise, trash, and nuisance ordinances with escalating fines for repeated issues.
Always review HOA or condo documents. Association rules can be stricter than city or county code. Some communities limit the number of rentals, set minimum stays, or ban short-term rentals altogether.
Other legal items to confirm
- Zoning: Some districts do not allow STRs.
- Permit transfer: A new owner may need to reapply if permits are not transferable.
- Insurance: Standard homeowner policies often exclude STR use. Get a policy designed for short-term rentals.
- Lending: Some loan products restrict STR properties or require extra reserves.
Taxes and registrations to plan for
- State and local taxes: Short-term rentals generally must collect and remit Florida sales tax and local tourist development taxes. These rates vary by county and can change, so verify the current rates and filing process.
- Local business tax receipts: Cities and counties often require an annual business tax or occupational license.
- Income taxes: Rental income is taxable. You can typically deduct items like mortgage interest, depreciation, property taxes, insurance, utilities, management fees, cleaning, maintenance, and supplies. Consult a CPA for your specific situation.
Build a simple compliance log with permit numbers, renewal dates, local contact details, and tax registration IDs. Good recordkeeping reduces audit stress and keeps your license in good standing.
Seasonality and demand in Destin
Who rents here
Destin draws families, multi-generational groups, and event travelers who want beach access, boating and fishing, and a laid-back coastal feel. Many homes and condos target weekly bookings in summer, with shorter stays common in spring and fall.
Peak, shoulder, and low seasons
- High season: Late spring through early fall with the strongest occupancy and average daily rates. Weekly stays are common.
- Shoulder seasons: Spring and fall with moderate rates, more weekend travel, and opportunities for extended stays.
- Low season: Late fall through winter, excluding holidays. Expect lower occupancy and ADR, with some longer stays by remote workers or winter visitors.
Price for calendar patterns. Weekends can perform better in shoulder months, and event weeks can lift ADR. Model your monthly rates and occupancy to reflect these patterns.
Management models and expected costs
Self-manage vs full service
Compliance and local contact
Destin area rules often require a local contact who can respond quickly to noise or nuisance calls. If you hire a manager, make sure the contract names them as the designated local contact, sets response standards, and defines penalties if they miss calls. This protects your permit and your reviews.
ROI basics and the key formulas
Short-term rentals are operations, not set-it-and-forget-it assets. Use simple, clear formulas to compare properties:
- Gross rental revenue = ADR × occupancy rate × 365 (or days available)
- Net operating income (NOI) = Gross rental revenue − operating expenses
- Cap rate = NOI ÷ purchase price
- Cash-on-cash return = Annual pre-tax cash flow ÷ total cash invested
- Break-even occupancy = (Annual operating expenses + annual mortgage payments) ÷ (ADR × 365)
Build your revenue model
- Gather monthly ADR and occupancy for similar properties from tools like AirDNA or local managers. Use true comps by bedroom count, location, and amenities.
- Estimate gross revenue by month. Sum it for the year. Adjust for owner stays, repairs, and downtime.
- Layer in platform mix. Note the share of bookings from Airbnb, Vrbo, direct, or manager websites, since fees differ.
- Track average length of stay and booking lead times, which affect pricing and vacancy.
Expenses to include
- Fixed: Property taxes, insurance, HOA or condo dues, internet/cable.
- Variable: Utilities, cleaning and laundry per turnover, consumables, booking and platform fees, repairs and maintenance, landscaping, pool service.
- Management: 18 to 35 percent for full-service managers is common. Self-managed owners still incur costs for cleaners and vendors.
- One-time: Furnishings, safety gear, photography, minor upgrades, and permit fees.
- Reserves: Set aside 5 to 10 percent of rental revenue for maintenance and capital items, especially in a coastal environment.
Stress test your numbers
Run three scenarios: conservative, base case, and aggressive. Then shift ADR or occupancy by 10 to 20 percent to see how cash flow moves. Test a sudden expense, such as a major HVAC replacement. Model 6 to 12 months of reserves to handle seasonality and storm season surprises.
What “good ROI” means in Destin
There is no one-size-fits-all number. Strong performers usually start with realistic ADR and occupancy, matched to a property type that guests want in peak season. Then they protect margins with efficient operations, cleanings aligned to stays, and responsive maintenance to avoid refunds.
Coastal properties often have higher insurance and maintenance due to wind coverage and salt exposure. If you buy in a condo or resort, HOA dues can be meaningful, but they may offset some costs for amenities, exterior maintenance, or insurance. The goal is a model that holds up in low season and still cash flows after management, taxes, and reserves.
Due diligence checklist for Destin STR buyers
Use this step-by-step list before you write an offer:
- Confirm parcel jurisdiction and zoning. City of Destin vs unincorporated Okaloosa County vs Walton County for Miramar Beach.
- Verify short-term rental permission, permits, and transfer rules for your address.
- Pull HOA or condo rules, including minimum stays, rental caps, registration steps, and fines.
- Check for any open violations, complaints, or enforcement history on the property.
- Confirm state and local sales and tourist tax collection and filing steps.
- Get insurance quotes for STR or landlord coverage, including wind and flood if required.
- Obtain lender terms for STR eligibility and required reserves.
- Request recent utility bills, HOA assessments, and property tax history.
- Inspect major systems with an eye to coastal wear: roof, windows, HVAC, plumbing, and water intrusion.
- Price out furnishings, safety equipment, and updates needed to compete.
- Interview 2 to 3 local property managers for fee schedules, service scope, and performance expectations.
- Benchmark ADR and occupancy by month with a reputable data source or a local manager’s comp set.
- Review event calendars and seasonal patterns that affect peak pricing.
Worksheet you can copy for your model
- Acquisition
- Purchase price, closing costs, initial permits
- Furnishings and launch costs
- Financing: down payment, interest rate, amortization
- Revenue assumptions
- ADR and occupancy by month, days available
- Other income: retained cleaning fees, pet fees, parking
- Operating expenses
- Property taxes, insurance, HOA/condo dues
- Utilities, internet/cable
- Cleaning, laundry, consumables
- Management fees, platform fees
- Repairs and maintenance reserve
- Marketing, photography, professional services
- Replacement reserve for big-ticket items
- Financing costs
- Annual debt service and any origination fees
- Outputs
- NOI, cap rate, pre-tax cash flow
- Cash-on-cash return
- Break-even occupancy
- Sensitivity: −20 percent, base, +20 percent scenarios
- Compliance log
- Permit numbers and renewal dates
- Local contact details
- HOA registration status
- Tax account numbers and filing cadence
Red flags to avoid
- HOA or condo documents that prohibit STRs or cap rentals.
- Pending zoning changes that could limit STRs near your target address.
- A property with repeated nuisance complaints or fines.
- Insurance that is unavailable or has premiums that erase your cash flow.
- Optimistic ADR or occupancy assumptions without conservative backup scenarios.
- Major deferred maintenance that turns into a large capital expense in year one.
Your next step on the Emerald Coast
If an Emerald Coast rental is part of your plan, a clear path helps you move faster and with less risk. You deserve local guidance on zoning, HOA rules, management quotes, and realistic monthly projections before you buy. That is the service model I follow for investors and second-home buyers across Destin, Miramar Beach, and 30A.
Ready to evaluate a property, build a working model, or line up local vendors? Connect with Paige A Brown for a tailored plan and a calm, well-run purchase process.
FAQs
What are the basic STR rules in Destin city limits?
- Expect registration or a permit, a 24/7 local contact, safety standards, and nuisance rules. Always confirm current code and whether permits transfer to new owners.
How do tourist and sales taxes work for Destin rentals?
- Short-term stays typically require collecting and remitting Florida sales tax plus local tourist development tax. Verify the current rates and filing steps for your property’s county.
What should I model for seasonality in Destin?
- Plan for peak demand from late spring through early fall, moderate shoulder seasons, and a softer late fall to winter period outside holidays. Weekly summer bookings are common.
What does a property manager usually charge here?
- Full-service vacation rental managers often charge 18 to 35 percent of rental revenue, sometimes with added fees for marketing or maintenance coordination.
How do I estimate break-even occupancy for a Destin STR?
- Add annual operating expenses and annual mortgage payments, then divide by ADR × 365. Run a few ADR and occupancy scenarios to stress test the result.
Do HOAs or condos near the beach allow short-term rentals?
- Many do, but some restrict or prohibit STRs or set minimum stay rules. Always read the association documents and confirm before you go under contract.
