The property features Outdoor Pool, Tropical Gardens, 24/7 Security, Beach Shuttle, Fiber Internet — amenities that support premium nightly rates, reduce vacancy, and improve guest satisfaction scores critical to Superhost/Premier Host status.
| Acquisition Cost | Amount | Notes |
|---|---|---|
| Down Payment | $62,573 | 30.0% of purchase price |
| Estimated Closing Costs | $10,429 | ~5% of purchase (international) |
| STR Permit Fee | $0 | Not required in this market |
| Initial Supplies & Setup | $2,500 | Smart lock, supplies, professional photography |
| Total Cash to Close | $75,502 |
| Amortization Detail | Value |
|---|---|
| Year 1 Interest Paid | $12,410 |
| Year 1 Principal Paid | $2,794 |
| Total Interest Over Loan Life | $158,089 |
| Loan-to-Value (LTV) | 70.0% |
| Scenario | Occupancy | Blended ADR | Gross Revenue | NOI | Net Cash Flow | CoC Return |
|---|---|---|---|---|---|---|
| Upside | 35.9% | $314 | $41,076 | $20,650 | $5,446 | 8.7% |
| Base | 30.4% | $266 | $29,500 | $14,831 | $-374 | -0.6% |
| Downside | 21.9% | $218 | $17,417 | $8,756 | $-6,449 | -10.3% |
Base case assumes moderate dynamic pricing and seasonal optimization across Airbnb + VRBO. Upside reflects Superhost/Premier Host status and aggressive peak-season pricing. Downside models minimal optimization and a soft shoulder-season demand environment.
| Month | Est. ADR | Occupancy | Nights | Revenue | Season |
|---|---|---|---|---|---|
| January | $184 | 65% | 20 | $3,686 | Shoulder |
| February | $197 | 70% | 20 | $3,949 | Peak |
| March | $201 | 72% | 22 | $4,417 | Peak |
| April | $165 | 55% | 16 | $2,633 | Shoulder |
| May | $128 | 38% | 12 | $1,540 | Off |
| June | $118 | 35% | 10 | $1,185 | Off |
| July | $148 | 50% | 16 | $2,370 | Shoulder |
| August | $128 | 42% | 13 | $1,669 | Off |
| September | $99 | 28% | 8 | $790 | Off |
| October | $107 | 30% | 9 | $963 | Off |
| November | $145 | 48% | 14 | $2,027 | Shoulder |
| December | $194 | 72% | 22 | $4,272 | Peak |
| Expense | Annual | Monthly | % of Gross | Notes |
|---|---|---|---|---|
| HOA / community fees | $1,800 | $150 | 6.1% | Pool, grounds, insurance (if included) |
| Property tax | $0 | $0 | 0.0% | CONFOTUR exempt (15 yrs) |
| Utilities (electric, water) | $4,050 | $338 | 13.7% | A/C dominant cost |
| Internet / WiFi | $960 | $80 | 3.3% | High-speed required for guest satisfaction |
| Repairs & maintenance | $834 | $70 | 2.8% | Age-based rate; 2025-vintage property |
| Furnishing reserve | $417 | $35 | 1.4% | Annual refresh set-aside |
| Insurance | $1,251 | $104 | 4.2% | Property + liability; hurricane coverage |
| STR permit & license | $0 | $0 | 0.0% | Not required |
| Accounting / tax prep | $600 | $50 | 2.0% | STR-specific CPA + FBAR/FATCA |
| Miscellaneous / contingency | $500 | $42 | 1.7% | Unforeseen guest issues, supplies |
| Platform booking fees | $1,622 | $135 | 5.5% | Blended ~5.5% of gross (Airbnb 3% + VRBO 8%) |
| Cleaning & turnover | $2,634 | $219 | 8.9% | ~$95/clean × 28 turnovers/yr |
| Total Operating Expenses | $14,669 | $1,222 | 49.7% | |
| Debt service (P&I) | $15,205 | $1,267 | 51.5% | $146,004 @ 8.5% / 20-year fixed |
| Total All-In Cost | $29,874 | $2,490 | 101.3% |
| Return Component | Annual Value | % of $62,573 Equity |
|---|---|---|
| Pre-Tax Cash Flow | $-374 | -0.6% |
| Mortgage Principal Paydown | $2,794 | 4.5% |
| Estimated Appreciation (5.0%/yr) | $10,429 | 16.7% |
| Tax Benefits (depreciation shield) | $1,547 | 2.5% |
| Total Return on Equity | $14,396 | 23.0% |
While Year 1 cash-on-cash is -0.6%, the total return profile is 23.0% when accounting for equity building via principal paydown, market appreciation, and a depreciation tax shield ($177,290 building value / 27.5 years = ~$6,447/yr deduction at a 24% bracket). The 30.0%% down payment de-risks the investment by providing a meaningful equity cushion from day one.
At $208,577, this 3BR villa in Punta Cana does not generate sufficient STR revenue to support the financing stack. The -0.6% cash-on-cash return means out-of-pocket cash contributions are required annually to cover debt service. Unless purchased all-cash at a significant price reduction, or held primarily as a personal-use asset with incidental rental income, the investment case does not hold under current market conditions and financing rates.
The base-case ADR of $266 and 30.4% occupancy represent a realistic but not conservative projection for a 3BR villa in this segment. Achieving the upside scenario ($314 ADR / 35.9% occupancy) requires Superhost status on Airbnb, Premier Host on VRBO, professional photography, and active dynamic pricing management. The downside scenario models a year of minimal optimization or a soft demand environment, which remains a real risk in highly seasonal markets where 60%+ of revenue is earned in a 10-week window.
Punta Cana handles 65%+ of DR foreign tourist arrivals, and the market added significant new Airbnb supply in 2024–2025. Competition is intensifying, but revenue per listing continues to grow year-over-year as the destination matures. The CONFOTUR tax incentive program is the primary structural advantage for new buyers — 15 years of 0% property tax and 0% income tax on certified projects represent a meaningful total-return enhancement that is difficult to replicate in any other Caribbean market at this price point.
Dual-list on Airbnb (3% host fee) and VRBO (8% host fee). Consider Booking.com for European travelers, a significant segment of Caribbean visitors. Self-management saves $5,900/yr versus a 20% property manager — a savings that substantially improves cash-on-cash return.
Local cleaning team ($95/turn), smart lock, WhatsApp-based guest communication for international travelers, airport transfer coordination, professional photography, bilingual listings.
Dynamic pricing with weekly updates, 3-night minimums during peak winter season, bilingual listings (English/Spanish), curated local experience guides, and Superhost targeting via rapid response rate.
Occupancy / VAT: DR charges 18% ITBIS (VAT) on rental income. Major platforms may collect automatically — verify with a local accountant before first booking.
Property tax (IPI): 1% annually on assessed value above ~RD$9.9M (~$170K USD). CONFOTUR-certified projects are exempt for 15 years — verify certification status with the developer before closing.
Income tax: DR taxes rental income at 27%. US owners must also report on Schedule E and may claim Foreign Tax Credits to avoid double taxation. Consult a CPA experienced in US-foreign property.
FBAR / Form 8938: Required if aggregate foreign financial accounts exceed $10,000 at any point in the year. File annually with your US tax return.
Depreciation: Building value ~$177,290 / 27.5 years = ~$6,447/yr for US tax purposes (40-year schedule may apply to foreign property — confirm with CPA).
Recommended team: (1) Bilingual DR real estate attorney for title/closing; (2) DR-licensed accountant for IPI and ITBIS; (3) US CPA for Schedule E, FBAR, and Foreign Tax Credits; (4) Title insurance company.
| Requirement | Action Needed |
|---|---|
| CONFOTUR Certification | Verify developer approval before closing |
| Title Insurance | Obtain from reputable DR title company |
| Legal Review | Engage bilingual DR real estate attorney |
| HOA Rules Review | Confirm STRs permitted in community bylaws |
| Insurance | Property + liability + hurricane/flood coverage |
| US Tax Compliance | Set up FBAR/FATCA with US CPA |
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Gross Revenue | $29,500 | $30,385 | $31,297 | $32,235 | $33,203 |
| Platform Fees | ($1,622) | ($1,671) | ($1,721) | ($1,773) | ($1,826) |
| Cleaning | ($2,634) | ($2,713) | ($2,794) | ($2,878) | ($2,965) |
| Net Rental Revenue | $25,244 | $26,001 | $26,781 | $27,584 | $28,412 |
| Operating Expenses | ($10,413) | ($10,725) | ($11,047) | ($11,378) | ($11,720) |
| NOI | $14,831 | $15,276 | $15,734 | $16,206 | $16,692 |
| Debt Service | ($15,205) | ($15,205) | ($15,205) | ($15,205) | ($15,205) |
| Pre-Tax Cash Flow | $-374 | $71 | $529 | $1,001 | $1,487 |
| Cumulative Cash Flow | $-374 | $-303 | $226 | $1,227 | $2,715 |
| Property Value | $219,006 | $229,956 | $241,454 | $253,527 | $266,203 |
| Loan Balance | $143,210 | $140,178 | $136,888 | $133,319 | $129,446 |
| Total Equity | $75,796 | $89,778 | $104,566 | $120,208 | $136,757 |
| Cash-on-Cash Return | -0.6% | 0.1% | 0.8% | 1.6% | 2.4% |