- Revenue = rate × 365 × occupancy; everything else is subtractions.
- Big four costs: platforms ~15%, management 20–25%, tax ~10%, upkeep ≈$4,800/yr.
- A $120/night 2BR at 87% nets ≈$17,100 a year — ≈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. Good news: 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 DOMA's actual 12.8%.
The three levers
Occupancy — driven by rating, response speed and dynamic pricing. Rate — driven by product: views, design, photos. Costs — mostly fixed in percentage terms; 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; hotel-grade fit-out stretches that cycle.