The deal numbers
Figures as recorded in the client deal tracker. The return basis and reporting period require confirmation.
- Purchase price$950,000
- Down payment$120,000
- Closing costs$18,600
- Design and furnishing$12,988
- Total entry cost$151,588
- Recorded annual cash flow$13,608
- Recorded cash-on-cash5.43%
The tax position
- Purchase price$950,000
- Typical cost seg reclassification25% of price
- Illustrative year-one deduction$237,500
- Illustrative tax reduction at 40%$95,000
An illustration, not this client's return: 25% of price reclassified at a 40% marginal rate, the same assumptions as our calculator. Your number depends on your study, your rate, and meeting the seven day and material participation tests. We are not a CPA firm.
The full story
Destin sells on water color. The Emerald Coast has the clearest water and the whitest sand on the Gulf, and it commands nightly rates that a functionally identical house on a browner stretch of coast cannot approach.
Mark and Farrah bought a four-bedroom at $950,000. In this market the variable that moves revenue most is walking distance to a beach access point. A house four blocks back from the beach and a house one block back can differ by 30% or more in nightly rate for the same square footage, and that gap is permanent because you cannot move the house.
Destin's season is long by beach market standards. Spring break traffic starts in March, summer runs hard through August, and a substantial autumn shoulder continues into October while the Gulf is still warm. That gives the calendar more billable weeks than an Atlantic beach market at the same latitude.
Two costs need honest treatment in any Gulf Coast model. Coastal insurance, including wind and flood coverage, has repriced sharply across Florida in recent years and is now a material line item rather than a footnote. And condominium or homeowner association assessments, where they apply, can arrive as large one-time items after a storm season. Both belong in the proforma at purchase.
Questions about this deal
What did the Destin property cost?
Mark and Farrah purchased a four-bedroom in Destin, Florida for $950,000.
What drives nightly rate differences in Destin?
Walking distance to a beach access point. Houses one block from the beach can command 30% or more over otherwise identical houses four blocks back, and that gap cannot be closed by renovation.
What costs are commonly understated on the Gulf Coast?
Coastal insurance, including wind and flood coverage, which has repriced sharply across Florida, and association assessments that can arrive as large one-time items after a storm season.
Related
- Short-term rental market analysis for Destin
- Fort Walton Beach: the Emerald Coast at a discount
- Santa Rosa Beach and 30A
- Florida short-term rental regulations
- Beach property investing guide
- Peter E., Three-property portfolio in Santa Rosa Beach
- Ashley & Billy, 4BR beach house in Fort Walton Beach
- Tiffany, 5BR beach house in Destin
- Erwin & Lilyana, Beach property in Florida Panhandle
- All client case studies
- The full deal tracker
- How the acquisition process works
- Financing a purchase like this
- The design and furnishing playbook
- The tax strategy behind these purchases