What do you all think about the Inlet Beach area STR market? Homes south of Hwy 98 are expensive, but those North and closer to Hwy 98 seem to be priced competitively (based on current market conditions) for houses under $1 million.

Here's a scenario, and I would like to hear your opinions, especially from those familiar with Santa Rosa Beach/Inlet beach area in the Florida Panhandle.

I am considering buying a 4 bed /3 bath second home/STR investment property in the 800K range with a rate of 4.5%, and considering a 5-to-10-year hold. This home has never been on rental and is almost a new build and is about ½ mile from the beach even though it is considered north.

However, I am worried about revenues and ROI. For homes in the 800k range and assuming I have managed to get a rate of 4.5% 5-year ARM, it seems like I need to have an annual revenue of at least 85k to barely make positive cash flow. I have assumed 20% rental management fee since I do have the bandwidth to self-manage.

I understand there are a lot of variables but is an annual revenue in the range of 85K achievable in this area and market conditions?

I understand these markets are appreciation-based, but based on the calculations I did, I need at approx.. 5 to 6% average appreciation over a period of 5 years to make this a profitable deal. Is this a good expectation for the market ?

Thanks in advance for any helpful hints or feedback.