What Does a PCB Vacation Rental Really Net After Expenses?
Gross rental income is the number sellers and listing agents quote. Net income — what you actually keep after HOA fees, insurance, management, taxes, maintenance, and mortgage — is what determines whether a PCB vacation rental makes financial sense. Here is a realistic net income model for PCB condos.
Gross rental income is the number that appears in listing descriptions and seller disclosures. It is also the least useful number for evaluating a PCB vacation rental investment. What matters is net income — what you actually keep after every expense is paid. In PCB's condo market, the gap between gross and net is large enough to change the investment thesis entirely.
Here is a realistic net income model for PCB condos at multiple price points.
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I'm a licensed Florida REALTOR® and Buyer's Agent with Coldwell Banker Realty — Panhandle, representing buyers across Panama City Beach and the Emerald Coast. License #BK3253849.
The Full Expense Stack
Every PCB vacation rental carries the following annual expenses:
HOA fees: The largest fixed expense for most PCB condo owners. Gulf-front high-rise fees run $800–$1,800/month ($9,600–$21,600/year). Mid-rise fees run $500–$1,000/month ($6,000–$12,000/year).
Building insurance (HO-6 individual unit policy): The association's master policy covers the building structure. The owner's HO-6 policy covers the interior of the unit — walls, floors, fixtures, personal property, and liability. HO-6 policies for PCB vacation rentals typically run $1,500–$4,000/year.
Flood insurance (individual unit): If the building is in a flood zone, the owner may need a separate flood policy for the unit's contents and improvements. $500–$2,000/year.
Property taxes: Bay County property taxes on a $500,000 PCB condo without homestead exemption (investment property) run approximately $6,000–$9,000/year.
Vacation rental management: Professional management companies charge 20–30% of gross rental revenue. This is the most variable expense — some owners self-manage, which eliminates the management fee but requires significant time investment.
Platform fees: Airbnb, VRBO, and Booking.com charge 3–5% of gross revenue in host fees.
Cleaning fees: Cleaning between guests runs $100–$250 per turnover. At 40–60 turnovers per year, this is $4,000–$15,000/year (often partially offset by guest-paid cleaning fees).
Supplies and restocking: Linens, towels, toiletries, kitchen supplies, and replacement items. $1,500–$4,000/year.
Maintenance and repairs: Appliance repairs, HVAC service, plumbing, and general maintenance. $2,000–$6,000/year for a well-maintained unit.
Mortgage (if financed): The largest variable expense. A $400,000 loan at 7% over 30 years is $2,661/month ($31,932/year).
Net Income Model: Gulf-Front 2BR/2BA
Purchase price: $500,000 Financing: $400,000 loan at 7% (20% down)
Gross rental income (realistic): $55,000/year
Expenses:
| Expense | Annual |
|---|---|
| HOA fees ($900/mo) | $10,800 |
| HO-6 insurance | $2,500 |
| Flood insurance | $1,000 |
| Property taxes | $7,500 |
| Management (25% of gross) | $13,750 |
| Platform fees (4%) | $2,200 |
| Cleaning (net of guest fees) | $3,000 |
| Supplies/restocking | $2,500 |
| Maintenance/repairs | $3,500 |
| Total operating expenses | $46,750 |
| Mortgage (P&I) | $31,932 |
| Total all-in expenses | $78,682 |
Net operating income (before mortgage): $55,000 − $46,750 = $8,250/year
Cash flow (after mortgage): $55,000 − $78,682 = −$23,682/year (negative cash flow)
The honest picture: A $500,000 Gulf-front 2BR/2BA financed at 80% LTV generates positive operating income but significant negative cash flow after the mortgage. This is a common profile for PCB vacation rentals — they generate income, but they do not pay for themselves at current prices and interest rates.
Net Income Model: Gulf-View 2BR/2BA (Lower Price Point)
Purchase price: $350,000 Financing: $280,000 loan at 7% (20% down)
Gross rental income (realistic): $38,000/year
Expenses:
| Expense | Annual |
|---|---|
| HOA fees ($650/mo) | $7,800 |
| HO-6 insurance | $2,000 |
| Flood insurance | $800 |
| Property taxes | $5,200 |
| Management (25% of gross) | $9,500 |
| Platform fees (4%) | $1,520 |
| Cleaning (net of guest fees) | $2,500 |
| Supplies/restocking | $2,000 |
| Maintenance/repairs | $2,500 |
| Total operating expenses | $33,820 |
| Mortgage (P&I) | $22,354 |
| Total all-in expenses | $56,174 |
Net operating income (before mortgage): $38,000 − $33,820 = $4,180/year
Cash flow (after mortgage): $38,000 − $56,174 = −$18,174/year (negative cash flow)
Cash Purchase: The Better Investment Case
PCB vacation rentals make more financial sense as cash purchases. Eliminating the mortgage payment converts negative cash flow to positive:
Gulf-front 2BR/2BA, cash purchase:
- Gross income: $55,000
- Operating expenses: $46,750
- Net operating income: $8,250/year
- Cash-on-cash return: 1.65% on $500,000
Gulf-view 2BR/2BA, cash purchase:
- Gross income: $38,000
- Operating expenses: $33,820
- Net operating income: $4,180/year
- Cash-on-cash return: 1.19% on $350,000
The cash-on-cash returns are modest — PCB vacation rentals are not high-yield investments at current prices. The investment case rests primarily on appreciation potential and personal use value, not current income.
What Sellers Quote vs. What You Keep
Sellers quote gross revenue. The rental history disclosure shows total rental income collected — before management fees, platform fees, cleaning, supplies, maintenance, HOA fees, insurance, and taxes.
The management company's gross is not your gross. If a management company quotes "$65,000 in gross bookings," they mean total booking revenue before their 25–30% management fee. Your gross is $45,500–$48,750 after their fee.
Occupancy rates matter more than peak rates. A unit that earns $500/night for 30 nights is worth less than a unit that earns $300/night for 90 nights. Ask for occupancy data, not just peak rates.
FAQ
What does a PCB vacation rental net after expenses?
After all operating expenses (HOA fees, insurance, taxes, management, cleaning, supplies, maintenance), a typical PCB Gulf-front 2BR/2BA nets $6,000–$12,000/year before mortgage. After a 20%-down mortgage at current rates, most PCB vacation rentals generate negative cash flow.
Is a PCB vacation rental a good investment?
PCB vacation rentals generate income but typically do not cash-flow positively when financed at current prices and interest rates. The investment case rests on appreciation potential and personal use value. Cash purchases generate modest positive returns (1–2% cash-on-cash).
What percentage does a PCB vacation rental management company charge?
PCB vacation rental management companies typically charge 20–30% of gross rental revenue. This is the largest variable expense after HOA fees and is the most important factor in net income.
How do I evaluate a seller's rental history disclosure?
Ask for gross revenue, management fees paid, and net revenue received by the owner. Also ask for occupancy data — number of nights rented and average daily rate. Gross revenue without occupancy data is not sufficient to evaluate the investment.
How do I find a buyer's agent who can help me model PCB vacation rental income?
Work with an agent who has specific experience with PCB vacation rental properties and can help you build a realistic income model. I represent buyers across PCB. Visit emeraldcoastbuyersguide.com/contact to get started.
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Written by
Kinsey Haddock P.A.Kinsey Haddock P.A. is a Broker Associate and REALTOR® with Coldwell Banker Realty, specializing in coastal real estate across the entire Florida Panhandle — from St. George Island and the Forgotten Coast to Panama City Beach, Scenic Highway 30A, and Destin.