Rental-yield claims on Dominican Republic real estate are wildly uneven. Some listings advertise 15% returns that turn out to be gross revenue before a single expense. Others quote modest numbers that ignore the Cabarete premium. Let's cut through it with a specific, honest pro forma: a typical one-bedroom condo, 100 meters from Kite Beach, managed professionally, rented year-round on Airbnb. Here's exactly what the math looks like.
The Subject Property
We'll model a property that's representative of the current Cabarete inventory.
Location: Kite Beach area, 100-meter walk to sand.
Size: 65 square meters (roughly 700 square feet), one bedroom, one bathroom, small terrace.
Purchase price: $285,000 (turnkey, furnished, move-in ready).
HOA: $240 per month.
Age: 8 years old, well-maintained building, no major capital assessments pending.
Internet: fiber, 300 Mbps.
A/C: split units in bedroom and living area, inverter-type (efficient).
View: partial ocean view, higher floor.
This isn't the cheapest inventory, but it's the category that actually rents well. Cheaper units without fiber, or without decent A/C, or on the ground floor in a noisy building, produce much worse numbers.
The Revenue Side
We'll use realistic nightly rates and occupancy for this type of property in 2026.
High season (December-April and July): $165 per night average.
Shoulder season (May-June and August-November): $110 per night average.
Occupancy rate: 68% weighted average across the year. This is a realistic number for professionally managed Kite Beach one-bedrooms. Some hit 75%, some land at 60%.
Let's math it.
High season months (5 months × 30 days = 150 nights, 68% occupancy = 102 nights × $165): $16,830.
Shoulder season months (7 months × 30 days = 210 nights, 68% occupancy = 143 nights × $110): $15,730.
Gross annual revenue: $32,560.
On a $285,000 purchase, that's 11.4% gross yield before expenses. This is the number that fuels the "Cabarete rents like crazy" reputation, and it's real. But it's not what you pocket.
The Expense Side
Now the honest subtractions.
Professional property management: 20% of gross. $6,512.
Airbnb / Vrbo platform fees: roughly 3% of gross, but the real drag is guest-side fees that suppress booking velocity. Effective impact, about 3% of gross. $977.
Listing photography, refresh, and marketing: $500 per year.
Utilities (water, electricity, internet) — with short-term guests running A/C heavily: $2,400 per year. This is a Dominican Republic number reflecting local electricity rates.
HOA: $240 × 12 = $2,880 per year.
Supplies and consumables (coffee, toiletries, towel replacements, kitchen restock): $1,200 per year.
Cleaning fees: typically passed through to guests, net neutral, but we'll budget $400 for off-guest deep cleans.
Maintenance and repairs: $2,500 per year. Appliance service, small repairs, occasional paint touch-ups. Lean year: $1,500. Rough year: $4,000.
Furniture replacement reserve: $1,500 per year. Furnishings don't last forever under short-term rental use.
IPI property tax: the property's assessed value is likely below the $175,000 USD threshold despite the $285,000 purchase price, meaning IPI is probably zero for this unit. We'll assume $0 but note that some higher-end properties do pay.
Insurance: $1,100 per year for a condo unit with contents coverage.
Income tax: rental income is subject to Dominican income tax. At typical effective rates for a non-resident foreign owner through a straightforward ownership structure, plan on 15-20% of net taxable income. For this pro forma, we'll assume $2,000 annual tax obligation — your accountant's actual calculation will differ based on your specific structure. See our individual vs corporation vs trust post for structure implications.
Total annual expenses: $21,969.
The Net Yield
Gross revenue: $32,560.
Total expenses: $21,969.
Net income: $10,591.
Net yield on $285,000 purchase: 3.7%.
Before you react, keep reading. This is the conservative, honest number that includes everything. Most marketing materials would quote the gross (11.4%), or the "NOI before tax" number ($12,591, or 4.4%).
Sensitivity: The Levers That Move the Number
Three factors move this math more than anything else.
Occupancy. Moving from 68% to 75% adds roughly $3,400 to gross revenue. Most of that drops to net, meaning the yield climbs from 3.7% to roughly 4.9%. This is why professional management matters — they get the extra bookings that an absentee owner self-managing from Toronto will miss.
Nightly rate discipline. Pricing $10 per night higher on average, if the market will bear it, adds roughly $2,500 to gross. Dynamic pricing tools, good photography, and strong reviews make this possible.
Self-management. Cutting the 20% management fee adds $6,500 to net — but only if you can actually handle the work from wherever you live. Most foreign owners can't, and the attempt often costs more in missed bookings and bad reviews than the savings.
The Appreciation Question
Net income is only half the return story. The other half is appreciation.
Cabarete has seen roughly 5-7% annual price appreciation over the past decade on well-located properties. That's not a guarantee, but it's the historical pattern. If this property appreciates 5% in a given year, that's $14,250 added to total return — bigger than the cash yield.
Combining cash yield and appreciation, the total return expectation on a well-positioned Kite Beach condo historically lands in the 8-12% range. That's the honest full picture.
What Makes This Property Better Than Average
A few details that push returns above the baseline.
Kite Beach proximity: walking distance is a real premium over a five-minute drive.
Fiber internet: kiteboarders and digital nomads filter listings by Wi-Fi speed.
Properly-sized A/C: bad A/C is the most common review complaint.
Higher floor with partial ocean view: pricing premium of roughly 15% over interior-facing.
Remove any one of these and expect roughly 10-15% lower gross revenue.
What Makes a Property Worse Than Average
Also worth naming.
Distance from beach beyond 10 minutes' walk. Nightly rates drop.
Noise issues. Beachfront buildings facing the main strip can score poorly on sleep reviews.
Ground floor units with limited privacy. Lower pricing.
Buildings without a working pool or with unclean common areas. Kills reviews.
Buildings in mid-renovation with cranes or scaffolding visible. Temporary but real revenue hit.
HOA restrictions on short-term rentals. Make sure the building explicitly permits short-term rentals — some don't.
The Financing Overlay
This pro forma assumes cash purchase. If you financed $170,000 of the $285,000 (60% LTV) at a 7.5% Dominican USD mortgage, your annual debt service would be roughly $15,200. Net cash yield after debt service would turn negative, but your cash-on-cash return on the $115,000 down payment would need to account for both appreciation and debt paydown. See our financing options post for the realistic financing picture.
Short version: cash buyers hit the net yields above. Financed buyers trade current cash flow for leveraged appreciation. Neither is universally right.
Your Next Step
If you want a pro forma built around a specific listing, send it to us. We'll pull recent comparable bookings, model your actual expenses, and build an honest projection. Start here and we'll do the math on your specific property rather than generic averages. For why Cabarete yields outperform the rest of this coast, see our yield outperformance post.
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