- Revenue = rate × 365 × occupancy, and everything else is subtractions.
- The big four costs are platforms ~15%, management 20–25%, tax ~10% and upkeep ≈$4,800/yr.
- A $120/night 2BR at 87% nets ≈$17,100 a year, which is ≈12% on a $139k villa.
- Occupancy is the highest-leverage variable, and it is bought with management quality.
Every “guaranteed yield” pitch dies on contact with a spreadsheet. The good news is that the real spreadsheet is short. Five lines of revenue and cost describe the whole business of a rental villa. Here they are, with numbers you can challenge.
The five lines
1. Gross. $120 × 365 × 87% ≈ $38,100. 2. Platforms. −15% → $32,400. 3. Management. −25% of the remainder → $24,300. 4. Income tax. −10% → $21,900. 5. Running costs. −$4,800 (pool, garden, utilities, minor repairs) → $17,100 net. On a $139,000 villa that is ≈12%, the math behind the actual 12.8% of DOMA.
The three levers
Occupancy is driven by rating, response speed and dynamic pricing. Rate is driven by product, meaning views, design, photos. Costs are mostly fixed in percentage terms, and the escape is a better contract, not a cheaper cleaner. Run your own scenario in the ROI calculator.
FAQ
Why 15% for platforms?
A blend of Airbnb/Booking commissions and payment costs across a typical booking mix. Direct bookings reduce it over time.
Is $4,800/year realistic for upkeep?
For a 1BR with pool and garden, yes, as a planning figure. Larger villas scale up roughly with area.
Do these numbers include depreciation?
No. Furniture refresh is usually planned separately every 4–5 years, and hotel-grade fit-out stretches that cycle.