Intorduction Project Plan Villas Investment Contact

 

The investment potential of "Ocean Breeze" is based on currently available information as detailed below.

 

 

 

SUPPOSITIONS

 

 

$US

 

Cost of house with land and pool for example    
$325,000.00
Average rental capacity as achieved in Las Terrenas2002-2003   
24 weeks

Average weekly rental for this type and class of villa

 

 

$1,400.00

 

Management charges for the villa including per month
$250.00
Management of cleaning services    
Management of pool maintenance    
Reception of clients at the airport and transfer to the villa    
Rental at preferential rates of a car or quad    
     

 

     
$US
$US
     
Net

Purchase

Term
Balance
 
Rental income
Balance
Year 1
$325,000.00
 
$30,600.00
$294,400.00
Year 2
$294,400.00
carried forward 
$32,130.00
$262,270.00
Year 3
$262,270.00
carried forward 
$33,736.00
$228,534.00
Year 4
$228,534.00
carried forward 
$35,423.00
$193,111.00
Year 5
$193,111.00
carried forward
$37,194.00
$155,917.00
Year 6
$155,917.00
carried forward 
$39,054.00
$116,863.00
Year 7
$116,863.00
carried forward 
$41,006.00
$75,857.00
Year 8
$75,857.00
carried forward 
$43,056.00
$32,801.00
Year 9
$32,801.00
carried forward 
$45,209.00
-$12,408.00

It is true to say that there are some factors not taken into account in the above which are

A) House and pool cleaning
B) General maintenance costs repainting etc
C) Insurance

However we have not mentioned the expected value of a property such as this villa which, in seven years time,would be in the order of $750,000 assuming only an 8% per year increase against an actual current 10-12%.

Purchase price
$325,000.00
increase 8% P A
$353,260.87
Year 1
 
$353,260.87
 
$401,432.81
Year 2
 
$401,432.81
 
$456,173.64
Year 3
 
$456,173.64
 
$518,379.14
Year 4
 
$518,379.14
 
$589,067.20
Year 5
 
$589,067.20
 
$669,394.55
Year 6
 
$669,394.55
 
$760,675.63
Year 7
 
$760,675.63
 
$864,404.12
Year 8
 
$864,404.12
 
$982,277.41
Year 9
 
$982,277.41
 
$1,116,224.33
Year 10

Effectively this asset, a villa with a value of $980,000.00 would be yours in nine years and the rental return would have made the purchase for you. Therefore for an initial investment of $325,000.00 you should have a return of over $980,000.00 in the next nine years tax free. Plus the use of a luxury holiday home for you and your family.

Note
The rental income will be affected if you take up all the major holiday weeks yourselves.