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 $27,270 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 $10,411.
Based on a total cash investment of approximately $354,212 (including acquisition costs), this represents:
- 8.0% Gross Rental Yield
- 2.9% Cash-on-Cash Return
- 3.1% 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. Figures are projections based on assumed nightly rates, occupancy, expenses and 5% annual growth; they are not guaranteed. Actual results may vary depending on acquisition costs, occupancy, rental rates, management performance, market conditions and future expenses.
The Numbers: What $354,212 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
| Item | Amount |
|---|---|
| Purchase Price | $340,000 |
| Down Payment | $340,000 (100% cash) |
| Transfer Tax (3%) | $10,200 |
| Legal Fees (1.0% + 18% ITBIS) | $4,012 |
| Additional Costs (Furniture and accessories included) | $0 |
| Total Cash Required | $354,212 |
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 | $131/night* | ~57% | $2,273/month | 12 months |
Annual Income Projection
- Potential income at 100% occupancy: $46,166
- Vacancy loss (at ~57% average occupancy): −$18,896
- Annual Income: $27,270 ($2,273/month)
Operating Expenses: The Real Cost of Ownership
| Expense Category | Monthly | Annual | % of Gross Income |
|---|---|---|---|
| Property Manager | $455 | $5,454 | 20.0% |
| HOA | $367 | $4,404 | 16.1% |
| Electricity | $325 | $3,900 | 14.3% |
| Property Tax | $143 | $1,716 | 6.3% |
| Repairs (2%) | $45 | $545 | 2.0% |
| Internet | $70 | $840 | 3.1% |
| Total | $1,405 | $16,859 | 61.8% |
That leaves $868/month ($10,411/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) | $2,273 | −$1,405 | $10,411 | 2.9% |
| Self-Managed | $2,273 | −$950 | $15,865 | 4.5% |
Self-managing removes the property manager’s fee and saves $5,454 in Year 1 — but it requires the owner to handle guest communication, bookings and coordination personally. Over 30 years, that gap compounds to roughly a $362,400 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 | $27,270 | $340,000 | — | — |
| 5 | $33,147 | $433,936 | +$102,536 | 28.9% |
| 10 | $42,305 | $553,824 | +$286,254 | 80.8% |
| 21 (Breakeven) | — | $947,226 | — | 251.0% |
Net gain if sold assumes estimated selling costs of about 8% of the property value, plus cumulative rental cashflow.
Year 21 is the breakeven point — every dollar of the original $354,212 investment has been recovered through cashflow, and the property’s equity has grown to $947,226. Everything earned after that point is 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 gated security (confirm current arrangements with the HOA) 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 about $455/month (20% of gross income) in exchange for the passive cashflow shown above.
Risk Factors to Consider
Occupancy Volatility — This analysis is built on about 57% average occupancy. If occupancy falls to 50% (the Conservative scenario), annual profit drops from $10,411 to about $7,144 and ROI falls to 2.0%.
All-Cash Exposure — Because this is a 100% cash purchase, the full $354,212 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 $131/night average this projection relies on.
Major Repairs — The 2% repairs allowance (about $45/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 ($354,212 × 3 = $1,062,636 total cash) would generate approximately $81,810 in combined gross annual income, with expected-scenario profit around $31,233/year across the portfolio — before any economies of scale on management.
Who This Property May Suit
May suit you if:
- You want a turnkey, professionally managed property with no renovation needed
- You have about $354,212 in available cash (this is not a financed purchase)
- You’re comfortable with a modest 2.9% Year 1 cash-on-cash return in exchange for long-term equity growth
- You value a 20+ year hold horizon — the real payoff here is the Year 21 breakeven and beyond
May not suit you 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 reduces annual profit by about a third)
Frequently Asked Questions
Yes. 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 about $7,144 and ROI to 2.0%. At 80% occupancy (Upside scenario), profit rises to about $17,947 and ROI to 5.1%.
US citizens must report worldwide rental income to the IRS, including Dominican rental income. You may be able to claim a Foreign Tax Credit for Dominican taxes paid. The Foreign Earned Income Exclusion does not apply to rental income. Consult a US tax professional.
Self-managing lifts Year 1 profit from $10,411 to $15,865 by removing the roughly $455/month management fee, but requires direct involvement in bookings and guest communication. Over 30 years the gap compounds to roughly $362,400.
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. After estimated selling costs and including cumulative rental income, the projected net gain if sold in Year 5 is about +$102,536 — a 28.9% ROI on the $354,212 total investment over the five-year hold. Resale timelines vary with market conditions.
Based on the 5% annual growth assumption applied to income, expenses and property value, the full $354,212 investment is recovered through cashflow by Year 21, at which point property equity stands at about $947,226.
This is structured as a 100% cash purchase — $340,000 purchase price plus $10,200 transfer tax and $4,012 legal fees (1% plus 18% ITBIS), for $354,212 total cash required.
Key Takeaways
- This turnkey 3BR/3.5BA villa with private pool generates an 8.0% gross yield and a 2.9% Year 1 cash-on-cash return on a $354,212 all-cash investment.
- Projected annual gross income is $27,270 at about 57% average occupancy; expenses run about $16,859/year (61.8% of gross), leaving about $10,411 in annual profit.
- Self-managing instead of using a property manager lifts Year 1 profit to about $15,865 (4.5% ROI), at the cost of hands-on involvement.
- Under a 5% annual growth assumption, the investment breaks even by Year 21. All figures are projections, not guarantees.