This case study evaluates the investment potential of a 3-bedroom, 3.5-bath turnkey villa with a private pool in Sosúa Ocean Village (#7 CDM4) based on current market conditions, rental demand, and operating assumptions.
With a list price of $340,000, the property demonstrates the potential to generate approximately $30,408 in gross annual rental revenue. After accounting for estimated operating expenses, including property management, HOA fees, utilities, property taxes, and ongoing maintenance, the projected Year 1 net operating profit is approximately $12,864.
Based on a total cash investment of approximately $353,600 (including acquisition costs), this represents:
- 8.9% Gross Rental Yield
- 3.6% Cash-on-Cash Return
- 3.6% Cap Rate Based on Purchase Price
This analysis is intended as a market-based case study and investment projection using current rental performance expectations and operating assumptions. Actual results may vary depending on acquisition costs, occupancy, rental rates, management performance, market conditions, and future expenses.
The Numbers: What $353,600 Actually Returns
This is a cash purchase — no financing, no mortgage — which means the full return shows up as cashflow from day one rather than being diluted by debt service. Here’s the real financial picture, drawn from the property’s investor summary.
Acquisition & Financing
| Purchase Price | Amount |
| Purchase Price | $340,000 |
| Down Payment | $340,000 (100% cash) |
| Transfer Tax (3%) | $10,200 |
| Legal Fees (1.0%) | $3,400 |
| Additional Costs(Furniture and accessories included) | $0 |
| Total Cash Required | $353,600 |
The listing: Villa · 3 Beds · 3.5 Baths · #7 CDM4, Sosúa Ocean Village.
High Season vs. Low Season Rental Performance
| Season | Nightly Rate (USD) | Occupancy % | Monthly Gross Income | Duration (Months) |
|---|---|---|---|---|
| High Season (Dec–Mar) | $169/night | 65% | $3,294/month | 4 months |
| Shoulder (Apr, Nov) | $128/night | 65% | $2,496/month | 2 months |
| Low Season (May–Oct) | $99/night | 50% | $1,517/month | 6 months |
| Total / Weighted Average | $128/night* | ~59% | $2,534/month | 12 months |
Annual Income Projection
- Potential income at 100% occupancy: $46,781
- Vacancy loss (at 65% occupancy): −$16,373
- Annual Income: $30,408 ($2,534/month)
Operating Expenses: The Real Cost of Ownership
| Expense Category | Monthly | Annual | % of Gross Income |
| Property Manager | $507 | $6,084 | 20.0% |
| HOA | $367 | $4,404 | 14.5% |
| Electricity | $325 | $3,900 | 12.8% |
| Property Tax | $143 | $1,716 | 5.6% |
| Repairs (2%) | $51 | $612 | 2.0% |
| Internet | $70 | $840 | 2.8% |
| Total | $1,462 | $17,544 | 57.7% |
That leaves $1,072/month ($12,864/year) in positive cashflow — this is a hands-off, professionally managed scenario.
Self-Managed vs. Hands-Off: The Management Fee Impact
| Strategy | Monthly Income | Monthly Expenses | Year 1 Profit | Year 1 ROI |
| Hands-Off (Property Managed) | $2,534 | −$1,462 | $12,864 | 3.6% |
| Self-Managed | $2,534 | −$955 | $18,945 | 5.4% |
Self-managing removes the property manager’s fee and saves $6,082 in Year 1 — but it requires the owner to handle guest communication, bookings, and coordination personally. Over 30 years, that gap compounds to a $404,048 difference between the two strategies.
What About Appreciation? The Long-Term Play
The investment journey below assumes 5% annual growth applied equally to income, expenses, and property value.
| Year | Income | Equity | If Sold (Net Gain) | ROI |
| 1 | $30,408 | $340,000 | — | — |
| 5 | $36,961 | $433,936 | +$116,702 | 33.0% |
| 10 | $47,172 | $553,824 | +$317,719 | 89.9% |
| 18 (Breakeven) | — | $818,251 | — | 215.2% |
Year 18 is the breakeven point — every dollar of the original $353,600 investment has been recovered through cashflow, and the property’s equity has grown to $818,251. Everything earned after that point is pure profit.
Key Entities Explained
Sosúa Ocean Village (SOV) A mixed-use gated community on the North Coast featuring villas, condos, and recreational amenities (waterpark, gym, restaurants, beach access), with 24/7 security and an established short-term rental infrastructure.
Property Management The hands-off scenario in this analysis assumes a professional manager handling bookings, guest communication, and turnover — priced at $507/month (roughly 20% of gross income) in exchange for the passive cashflow shown above.
Risk Factors to Consider
Occupancy Volatility — This analysis is built on 65% average occupancy. If occupancy falls to 50% (the Conservative scenario), annual profit drops from $12,864 to $7,718 and ROI falls to 2.2%.
All-Cash Exposure — Because this is a 100% cash purchase, the full $353,600 is at risk with no leverage. Returns are steady but capital is fully committed rather than amplified through financing.
Rate Compression — High season rates ($169/night) are more than 70% above low season rates ($99/night); a shift in seasonal demand patterns would meaningfully change the blended $128/night average this projection relies on.
Major Repairs — The 2% repairs allowance ($51/month) covers routine maintenance but may not be sufficient for larger capital items (A/C replacement, pool equipment, roofing).
The Three-Property Strategy
Investors purchasing three of these units ($353,600 × 3 = $1,060,800 total cash) would generate approximately $91,224 in combined gross annual income, with expected-scenario profit around $38,592/year across the portfolio — before any economies of scale on management.
Best Choice Based on Your Situation
Ideal for You If:
- You want a turnkey, professionally managed property with no renovation needed
- You have $353,600 in available cash (this is not a financed purchase)
- You’re comfortable with a modest 3.6% Year 1 cash-on-cash return in exchange for long-term equity growth
- You value the 15+ year hold horizon — the real payoff here is the Year 18 breakeven and beyond
Not Ideal If:
- You need strong Year 1 cashflow relative to capital deployed
- You want to use leverage/financing to amplify returns
- You’re not prepared to reserve for occupancy dips (the Conservative scenario roughly halves annual profit)
Frequently Asked Questions
Yes. Resale villas in SOV typically close at 90-95% of asking price for all cash offers. Always negotiate based on condition, recent inspection reports, and comparable recent sales.
No. Professional management handles all operations. Most investors visit 1-2 times annually for personal enjoyment and to inspect conditions. Remote oversight via property management portals and bank statements is typically available.
At 50% occupancy (Conservative scenario), annual profit falls to $7,718 and ROI to 2.2%. At 80% occupancy (Upside scenario), profit rises to $19,296 and ROI to 5.5%.
US citizens must report worldwide rental income to the IRS, including Dominican rental revenue. You can use Foreign Earned Income Exclusion under specific conditions or claim the Foreign Tax Credit. Consult a US tax professional specializing in expatriate real estate for accurate structuring.
Self-managing lifts Year 1 profit from $12,864 to $18,945 by removing the $507/month management fee, but requires direct involvement in bookings and guest communication. Over 30 years the gap compounds to roughly $404,048.
Sosúa Ocean Village villas have a strong resale history, with most resales closing within 180 days. Based on the 5% annual appreciation assumption used in this analysis, the $340,000 purchase price grows to roughly $433,936 in equity by Year 5. Combined with cumulative rental income over that period, the projected net gain if sold in Year 5 is +$116,702 — a 33.0% cash-on-cash ROI on the $353,600 total investment over the five-year hold.
Based on the 5% annual growth assumption applied to income, expenses, and property value, the full $353,600 investment is recovered by Year 18, at which point property equity stands at $818,251.
This is structured as a 100% cash purchase — $340,000 purchase price plus $10,200 transfer tax and $3,400 legal fees, for $353,600 total cash required.
Key Takeaways
- This turnkey 3BR/3.5BA villa with private pool generates an 8.9% gross yield and a 3.6% Year 1 cash-on-cash ROI on a $353,600 all-cash investment.
- Realistic annual gross income is $30,408 at 65% occupancy; expenses run $17,544/year (57.7% of gross), leaving $12,864 in annual profit.
- Self-managing instead of using a property manager lifts Year 1 profit to $18,945 (5.4% ROI), at the cost of hands-on involvement.
- Under a 5% annual appreciation assumption, the investment breaks even by Year 18.