Thinking about a Thomas Drive condo as a short-term rental but not sure how to pencil the numbers? You’re not alone. This stretch of Panama City Beach draws steady vacation demand, yet returns depend on the building, unit type, HOA rules, and seasonality. In this guide, you’ll get a simple underwriting framework tailored to Thomas Drive so you can forecast revenue, include the right expenses, stress test risks, and make a confident offer. Let’s dive in.
Why Thomas Drive attracts STR demand
Location, parks, and marinas
Thomas Drive runs along the beach near Thomas Drive Park with quick access to St. Andrews State Park and multiple marinas around Grand Lagoon. That mix brings families, anglers, boaters, and nature-focused visitors who value beach access and easy launches. Many condos here are marketed for vacation stays because the setting supports it.
Seasonality and guest segments
Expect pronounced seasonality. Late spring and summer, plus spring break periods, drive the highest occupancy and ADR. May and September–October act as shoulder seasons, and winter slows, though longer snowbird stays can help some units. Your target guests include families, multi-family groups, fishing and boating parties, couples on short escapes, and longer winter renters when the unit is set up for extended stays.
What can limit STRs on Thomas Drive
City and county STR rules
Short-term rentals in Panama City Beach and Bay County typically require registration or licensing, a business tax receipt, and compliance with safety, occupancy, noise, and parking rules. Check both the City of Panama City Beach municipal code and Bay County code for current requirements before you underwrite. Noncompliance can lead to fines and blocked bookings.
HOA and condo restrictions
Condo associations often set minimum lease lengths, rental caps, or require approvals and specific insurance endorsements. Some HOAs prohibit STRs altogether. Always obtain the CC&Rs, rental policy, and recent meeting minutes to confirm what is allowed and whether onsite management is required. If the HOA bans or severely restricts STRs, the deal is not suitable for an STR plan.
Taxes, insurance, and life safety
Florida applies transient rental taxes and state sales tax to short stays, collected from guests and remitted by owners or managers. STR activity can require different insurance coverage than a standard homeowner policy. Local rules may also require safety equipment, occupant notices, and sometimes inspections. Build these items into your plan from day one.
Revenue modeling that fits Thomas Drive
ADR and occupancy by month
Use month-by-month ADR and occupancy to model seasonality rather than one annual average. Start with direct comps in the same building when possible, or within a 0.5–3 mile radius that matches unit type, view, and amenities. Review booking lead times to understand how much revenue comes from last-minute stays versus advance bookings.
Unit mix and amenity premiums
- 1-bedroom units: easier to fill and strong ADR per square foot, though lower absolute ADR than larger units.
- 2–3+ bedroom units: higher total ADR and strong appeal for groups in peak and shoulder seasons, but higher turnover costs.
- View and access: gulf-view or beachfront units command meaningful ADR premiums. Ground-floor or easy beach access often appeals to families.
- Amenities that lift rates: pool, covered parking, elevator, in-unit laundry, updated kitchens and baths, outdoor space, and pet-friendly policies. Compare comps with and without these features to quantify uplift.
Ancillary revenue choices
Decide whether to pass cleaning, pet, parking, and extra-guest fees to guests or absorb them. Either way, include the expenses in your operating model. Equipment rentals and late check-out fees can add modest income.
Expense lines investors underestimate
HOA and insurance
HOA fees can be your largest recurring cost for a condo STR, especially on the coast. Understand what they include, such as building insurance, reserves, utilities, landscaping, pool, trash, and elevator maintenance. Separate property-level insurance and flood coverage in your model. Flood and wind insurance costs vary widely by building and elevation, and windstorm deductibles can be high.
Cleaning and management
Cleaning fees typically range from about 75 to 250 dollars or more per turnover depending on size and standards. Many hosts pass this fee to guests, but you should still model it as an expense if you plan to subsidize or cover it at times. Full-service STR management commonly runs 15 to 30 percent of gross rental revenue, while co-hosting models can be around 10 to 20 percent. Include OTA or platform fees as well.
Utilities, marketing, and reserves
If utilities are not fully covered by the HOA, include electricity, water, sewer, and internet/TV. Budget for marketing and listing costs. For coastal wear and tear, set a reserve for replacement at roughly 2 to 5 percent of revenue, adjusted for unit age and furnishing level.
KPIs to track before you buy
- Monthly gross rental revenue
- Net operating income (NOI) before debt service
- Cash-on-cash return and payback period
- Break-even occupancy by month at target ADR
- Average length of stay, turnover rate, and RevPAR
- Debt coverage ratio if you are financing
Data sources and comp method
Use multiple independent sources to triangulate ADR and occupancy, such as STR data platforms and live marketplace comps. Pull 12 to 24 months of monthly ADR and occupancy, and average like months across years to capture seasonality. Prioritize same-building comps, then nearby buildings within 0.5–3 miles. Match bedroom and bath count, sleeping capacity, view, parking, elevator access, pool presence, and minimum stay rules. Adjust for condition and amenity differences and document your rationale. Cross-check with at least one local property manager’s monthly occupancy patterns and expense benchmarks.
Risks to stress test in this market
- Hurricane, storm surge, and flood risk with potential vacancy and repair downtime
- Insurance availability and premium spikes, plus windstorm deductibles
- Regulatory changes that alter licensing, inspections, or permitted STR activity
- HOA restrictions, special assessments, reserve shortfalls, or litigation
- Oversupply from rapid STR growth in the micro-market
- Parking constraints, especially for guests with boat trailers
- Seasonality sensitivity if returns rely heavily on a few peak weeks
- Coastal maintenance needs from salt air and humidity
A practical worksheet for your numbers
Include these inputs and calculations to model a Thomas Drive condo accurately:
Key inputs
- Address and unit ID; BR/bath, square footage, sleeping capacity
- View type and walk distance to beach
- Distance to St. Andrews State Park
- HOA name and monthly fee with inclusions and reserves
- Property tax and insurance estimates, including flood
- Mortgage assumptions and monthly payment
- Furnishings and initial capex budget
- Management fee percent and platform fee percent
- Cleaning cost per turnover and expected minimum stay rules
- Utilities and other recurring owner-paid items
Revenue and expenses
- ADR and occupancy by month
- Nights available net of owner use
- Gross rental revenue plus any ancillary income
- Cleaning expense based on turnovers and average length of stay
- Utilities, HOA, insurance, taxes, management, OTA fees, and reserves
Returns and sensitivities
- NOI, debt service, and cash flow before tax
- Cash-on-cash return and cap rate
- Break-even occupancy per month
- ADR and occupancy sensitivity tables
- Hurricane downside: months with zero revenue and partial recovery period
- Insurance shock scenarios, including deductible hits
Thomas Drive vs nearby submarkets: what to ask
- How large is the ADR premium for gulf-view or beachfront versus inland or bay-side units nearby?
- Does proximity to St. Andrews State Park extend shoulder season occupancy or change the guest mix?
- Are HOA policies supportive of STRs, and are any changes under consideration?
- What are realistic HOA fees and what do they include each month?
- What are flood and wind insurance costs for the specific building, and what are the deductibles?
- How many comparable STRs are in the building or block, and are occupancy trends stable?
- What are typical cleaning and management costs for 1, 2, and 3-bedroom units on Thomas Drive?
- How often have storms caused temporary STR restrictions or closures locally?
- What is your break-even occupancy if you cover cleaning and utilities versus passing cleaning to guests?
- Can the unit support longer winter stays to stabilize cash flow?
Your next steps
- Obtain condo docs, rental policies, reserve studies, and recent HOA minutes. Speak with the association manager about rules and any pending changes.
- Pull property-level STR data and gather 6 to 8 direct building or near-building comps with matching bedroom count, view, and amenities.
- Request building-specific insurance pre-quotes for wind and flood based on elevation and FEMA zone.
- Build a 12-month pro forma with monthly ADR and occupancy, full expenses, and downside scenarios.
- Validate operating assumptions with one or two local STR managers and compare to your model.
- Confirm city and county tax registration and remittance steps for transient rental and sales tax.
- Verify parking capacity and boat or trailer rules if you plan to target anglers and boaters.
- Make your decision using both levered and unlevered metrics, plus stress-case outcomes.
A well-underwritten Thomas Drive condo can be a compelling STR asset when you buy the right unit in the right building and price in true operating costs. If you want a local, boutique team to help you source, evaluate, and close with confidence, connect with The Warren Group to get started.
The Warren Group | Start Your Coastal Search
FAQs
How do short-term rental rules work in Panama City Beach and Bay County?
- You typically need registration or licenses, a business tax receipt, and compliance with safety, occupancy, noise, and parking rules at both the city and county level.
What management fee should I model for a Thomas Drive condo STR?
- Full-service management commonly ranges from 15 to 30 percent of gross rental revenue, while co-hosting models may run around 10 to 20 percent.
How do I estimate cleaning costs by unit size on Thomas Drive?
- Use a per-turnover range of roughly 75 to 250 dollars or more, scaling with bedroom count and post-stay standards, and tie total cost to your turnover rate.
Do I need flood insurance for a condo near Thomas Drive?
- Many coastal condos sit in FEMA flood zones; obtain building-specific flood quotes and budget for wind coverage and potential high windstorm deductibles.
How does proximity to St. Andrews State Park affect occupancy?
- Access to the park can support shoulder and off-peak demand by attracting families, anglers, and eco-focused guests, though peak summer still dominates.
What KPIs matter most when comparing Thomas Drive units?
- Track monthly ADR and occupancy, NOI, cash-on-cash return, break-even occupancy, RevPAR, and debt coverage ratio to compare properties on equal footing.
