Does a rental pro forma for Rosemary Beach look almost too good to be true? You are not alone. With premium nightly rates and strong summer demand, numbers can look glossy at first glance. The real test is what remains after seasonality, insurance, HOA rules, and taxes. In this guide, you’ll learn how to verify projections with documents, rebuild the math yourself, and stress-test the results so you can buy with confidence. Let’s dive in.
Why Rosemary Beach rents differently
Rosemary Beach sits on Scenic Highway 30A and draws travelers for its walkability, beach access, architecture, and amenities. That premium appeal drives strong pricing in peak season. It also means you must account for HOA rules, coastal insurance, and hurricane risk. Your goal is simple: confirm a seller’s projection matches reality once local costs and risks are included.
Start with proof, not promises
Ask for source documents
Request primary documents before you trust any top-line number. Here is what to ask for:
- 12 to 36 months of monthly P&Ls showing revenue, nights booked, ADR, and occupancy
- Platform payout statements from Airbnb or VRBO and the full booking calendar export
- Management company statements with fees, cleaning, taxes collected and remitted
- Lodging tax registration and remittance receipts
- HOA covenants and rental rules, plus proof of good standing
- Insurance declarations for homeowners, wind, and flood, with current premiums
- Recent invoices for utilities, cleaning, landscaping, pool service, and repairs
- List of capital improvements and dates
- Property management agreement, including fees and termination terms
If a seller will not provide platform-level statements and booking calendars, treat the projection as higher risk.
Rebuild revenue and occupancy
Do not rely on an average. Reconstruct revenue by month using ADR and nights booked. Compare performance to market-level data so you see seasonality clearly. You can reference high-level benchmarks from sources like AirDNA market data to understand typical ADR and occupancy by bedroom count and season. Verify that the home’s calendar reflects real bookings, not owner-blocked dates.
Price and seasonality: get local
Compare to true comps
Match to properties with the same bedroom count, similar distance to the beach, and comparable amenities. Parking, outdoor space, and pools can impact ADR. Do not compare a 2-bedroom carriage house to a 4-bedroom Gulf-side home.
Analyze monthly patterns
Peak weeks often carry the year on 30A. Review performance over 12 to 36 months to capture spring break, summer, holiday weeks, and softer shoulder months. For visitor demand context, check Walton County tourism trends. Build your model month by month rather than using one annual occupancy rate.
Count every 30A cost
Operating expenses to include
Your “all-in” expense list should be explicit. Do not guess.
- Property management fees. Full-service management often runs about 20 to 35 percent of bookings. Confirm the exact rate and minimums.
- Platform and payment fees
- Cleaning and linens per stay, plus mid-stay cleans
- Utilities: water, sewer, power, gas, internet, cable
- HOA or POA dues and any rental-related assessments
- Property taxes and any special assessments
- Routine repairs, maintenance, landscaping, and pool care
- Marketing or boosted listings
- Licensing and local lodging taxes
- Reserves for replacement and storm repairs
Insurance and flood considerations
Many coastal properties sit in FEMA special flood hazard areas where flood insurance is required by lenders. Confirm the flood zone and shop current premiums before you underwrite. Use the FEMA Flood Map Service Center to verify the property’s flood designation, and monitor updates from the Florida Office of Insurance Regulation for market conditions and wind coverage availability.
Taxes and licenses
Short-term rentals are typically subject to state sales tax on transient rentals and county tourist development tax. Confirm who collects and remits these taxes and whether amounts in the financials are net or gross of tax.
- State guidance: Florida Department of Revenue transient rental rules
- County guidance: Walton County Tourist Development Tax
HOA rules and enforcement
Rosemary Beach is governed by community covenants and rental policies. Always review the latest RBPOA documents for any minimum stay rules, registration steps, guest guidelines, and fines. Compliance affects income and your ability to operate.
Build a bottom-up pro forma
Use simple math and write each assumption down.
- Gross Rental Revenue = ADR × Occupancy% × 365
- Net Operating Income (NOI) = Gross Revenue − all recurring operating costs and reserves
- Cap Rate = NOI ÷ Purchase Price
- Cash-on-Cash Return = (NOI − debt service) ÷ Cash Invested
- Break-even Occupancy = (annual fixed costs + target profit) ÷ (ADR − variable cost per occupied night)
Example framework to test a projection:
- Seller claims $150,000 gross revenue.
- Apply your expense build: management 28 percent, utilities $7,200, HOA $6,000, cleaning net to owner $8,000, insurance $9,500, property taxes $12,500, routine maintenance $4,500, reserves 7 percent of revenue.
- Recalculate NOI and cash flow after debt service. Small shifts to ADR or occupancy can change returns a lot.
Stress-test the numbers
Treat scenarios like a pre-flight checklist.
- Conservative case: ADR down 10 to 15 percent and occupancy down 10 to 20 percent.
- Base case: 3-year averages adjusted for known changes like new supply or management switch.
- Upside case: modest ADR and occupancy gains of 5 to 10 percent. Treat this as less certain.
- Hurricane buffer: model several closed days or weeks and higher deductibles in a storm year. Track storm timing with the National Hurricane Center.
- Insurance jump: test premiums up 25 to 50 percent.
Carry a cash reserve for storms and major repairs. Many owners set aside 5 to 10 percent of gross revenue, or a fixed amount that fits the home’s age and systems.
Red flags to pause on
- Only a summary is provided. No platform or management statements.
- Year-round occupancy above 80 to 90 percent without monthly details.
- ADR well above similar units without verifiable differentiators.
- Missing or very low insurance premiums.
- Vague expense lines like “maintenance: $500” with no invoices.
- No proof of lodging tax registration or remittance.
- HOA restrictions that limit stays, add costly steps, or show outstanding violations.
- Late discovery of major capital projects like roof, decking, or structural repairs.
Who to contact for confirmation
- Community association for the latest covenants and rental rules
- Local property managers for ADR and occupancy validation
- Insurance broker experienced in Florida coastal policies
- CPA familiar with vacation rental taxation and passive activity rules
- County offices for public records. You can confirm ownership, assessed values, and parcel details using Walton County Property Appraiser records, and align your lodging tax steps with the Walton County Tourist Development Tax.
Simple vetting checklist
Collect original source documents. Platform payouts, management statements, and booking calendar.
Reconstruct gross revenue. Verify ADR and booked nights month by month. Adjust for owner stays and discounts.
Rebuild expenses line by line. Use invoices and statements. Include cleaning, utilities, HOA, insurance, taxes, maintenance, marketing, and reserves.
Confirm tax compliance. Match revenue to amounts collected and remitted for state and county lodging taxes per Florida Department of Revenue guidance and the Walton County Tourist Development Tax.
Benchmark the model. Compare ADR and occupancy to Rosemary Beach peers using sources like AirDNA market data and your own calendar checks.
Verify flood zone and insurance. Check FEMA flood maps at the FEMA Flood Map Service Center and align quotes with the Florida Office of Insurance Regulation.
Run three scenarios. Conservative, base, and upside, plus a hurricane interruption test and an insurance increase test.
Compute returns. Calculate NOI, cap rate, and cash-on-cash under each case.
Validate with local pros. Cross-check assumptions with a 30A property manager and CPA.
Move from projection to decision
When you slow down and verify the inputs, you protect your downside and make a clearer decision. The strongest Rosemary Beach investments pair lifestyle appeal with well-documented income, realistic expenses, and smart reserves. If you want a local, numbers-forward perspective while you compare homes and fine-tune assumptions, we are here to help.
Ready to pressure-test a property on your shortlist and see how it stacks up to neighborhood comps? Work with the team that pairs 30A market insight with a white-glove process. Connect with Emerald Coast Signature Collection to get started.
FAQs
How do I calculate NOI for a Rosemary Beach rental?
- Start with gross revenue by month, then subtract all operating costs and reserves: management, platform fees, cleaning, utilities, HOA, insurance, property taxes, maintenance, marketing, and licensing.
Which taxes apply to short-term rentals in Walton County, Florida?
- Most rentals owe state sales tax on transient rentals and the county tourist development tax; confirm rules with the Florida Department of Revenue and the Walton County Tax Collector.
How do HOA rules in Rosemary Beach affect rental income?
- Covenants can set minimum stays, guest rules, registration steps, and fines; these can limit your calendar or add costs, so review the latest HOA documents and confirm compliance history.
What insurance should I expect near the beach?
- Budget for homeowners plus wind and flood where required; verify flood zones with the FEMA Flood Map Service Center and check market conditions via the Florida Office of Insurance Regulation.
How big should my reserve be for storms and repairs?
- Many owners set aside 5 to 10 percent of gross revenue annually or a fixed fund sized to the home’s age and systems, plus a separate emergency cushion for hurricane-related closures.
