Vacation Rental Returns in Punta Cana: The Real Numbers

Every week the same brochure lands in my inbox promising a "15% guaranteed return" on some Punta Cana project. Today I want to show you the real numbers, pulled from the units managed by the operators my clients work with in Bávaro. Spoiler: the business is good — it's just a different number.

A well-located one-bedroom condo in the Los Corales-El Cortecito area, bought for around US$150,000, bills between US$18,000 and US$24,000 a year in vacation rental income at 65-75% occupancy. Out of that comes the management fee (20-30%), condo maintenance (US$150-300 monthly), utilities, internet, supplies, and the IPI property tax if the project doesn't carry CONFOTUR — the Dominican tourism-development incentive law. The realistic net lands at US$10,000-15,000: a 7-10% annual return on the investment. Excellent for dollar income — but a long way from the brochure.

Three variables separate a 9% unit from a 5% unit: actual walking distance to the beach (will the guest walk or not), the quality of the operator (photography, dynamic pricing, reviews), and how the unit is furnished. The good news: all three are choices you make at the time of purchase. The bad news: the brochure won't tell you about any of them.

If you're weighing an investment in the area, ask me for the numbers on the specific complexes you're considering: real occupancy, average rates, and full expenses. Comparing the brochure to reality before you sign is, literally, my job.