Las Garzas 3 bedroom House
Welcome to Las Garzas, a newly built gated community located in Bombita, a hillside…
$339,000
A turn key apartment hotel with a 10 - 12% R.O.I.
For Sale
$3,500,000
We are offering our boutique apartment hotel for sale consisting of 16 individual furnished and recently
renovated apartments ranging from one, two and three bedroom apartments and a business model adaptable to various target markets as well as different market conditions even those presented post Covid-19.
In 2013 and 2014 the entire project was renovated. In 2018 a solar system was installed that offsets all electric consumption.
All apartments are individually furnished and have a fully equipped kitchen with all the necessary appliances. With this model, you the owner can target the more independent traveler, the remote workers as well as long-term clients who rent on a renewable yearly contract basis.
In total there are 16 apartments divided over two buildings; each building has 8 apartments.
Building 1:
Ground floor = 4 x one-bedroom apartments of 60m2 each
Second floor = 2 x two-bedroom apartments of 120m2 each
Third floor = 1 x two-bedroom apartment of 90m2 + 1 x three-bedroom duplex of 200m2
Building 2:
Ground floor = 4 x one-bedroom apartments of 45m2 each
Second floor = 2 x two-bedroom apartments of 80m2 each
Third floor = 2 x one-bedroom penthouse apartments of 80m2 each
Common areas:
◦ A 55,000 gallon swimming pool with jacuzzi
◦ A bar with lounge area including separate BBQ cooking area
◦ A garden all around the common areas
Other facilities:
◦ A large storage facility behind Building 1
◦ Parking areas
◦ Back up generator behind the parking area
◦ Onsite laundry facility
◦ Separate workshop
A small team manages the facilities’ management, housekeeping, maintenance, and pool. Security, garbage collection, fumigation and street/beach cleaning is sub-contracted and paid for by the Bahia de Arena Home Owners’ Association. Other services like accounting and legal tasks are all handled by subcontracted accounting and legal departments. Food & Beverage services are also sub-contracted to a local partnered restaurant who is in charge of breakfasts as well as room service deliveries.
From the 2016 onwards this business was listed as the number one property on Booking.com in the
Cabarete area.
The following awards were given in the subsequent years:
2015 – 9.3 score on Booking.com
2016 – 9.4 score on Booking.com
2017 – 9.4 score on Booking.com
2018 – 9.5 score on Booking.com as well as a 4.5 out of 5 on Hotels.com
2019 – 9.5 score on Booking.com as well as 9 out of 10 on Hotels.com
2020 – 9.6 score on Booking.com as well as 9 out of 10 on Hotels.com
The business is listed on all the major online travel agencies (OTA’s) like Booking.com, Expedia, hotels.com, Airbnb and several local and international tour operators and naturally as well on it’s own website. Most reservations since 2019 are direct reservations as our website has a very good SEO and online presence. We also have a large loyal customer base, which provides us with a lot of referral clients through word of mouth.
In 2018 the business installed 72 x solar panels of 365 watt made from Hyundai Korea with 2 x SMA 1000W inverters. This solar power system injects into the grid during the day and then takes from the grid when the sun goes down. What we inject during the day usually offsets what we consume during the night. This way the highest single expense is completely offset. In addition to the solar panels we also have a second DC pool pump, which is connected to another 4 solar panels and works around 6 hours a day. We have another AC pool pump which works in the early and late hours of the day or on days that it is not sunny. Our DC pump lowers our pool electric consumption by 50-75%. Furthermore, several cleaning systems in which natural products
replace chemical products have been implemented in an effort to reduce the carbon footprint.
The business model is perhaps one of the most unique selling points as the business model is very flexible and adaptable.
You, as the potential investor, can easily adapt the business model to your own needs or to those of a changing market. Over the years we have implemented the following business models successfully:
This model includes only long term renters with each a renewable 12-month lease. Each client rents a completely furnished apartment and pays a fixed rental fee each month. Utilities such as electricity, cable TV box & drinking water are billed additionally to the client. Electricity is charged by the KW/h and each apartment has its own electric meter. The per KW/h charge includes the usage of our own back up generator. Since 2018 we have installed 72 solar panels offsetting almost 100% of our yearly +- 10,000 USD electricity expenses. Therefore, the monthly electricity consumption of each renter is an additional income as the solar panels offset the expense.
Cable TV and drinking water are both minor expenses for the renter and both are optional at their own discretion. Internet, street water, cooking gas and common area expenses are all included in the monthly rental rates as these are common services and are not individually metered. These expenses are not very costly.
A once a week cleaning service is mandatory per rental contract. The cleaning fees charged offset all the expenses related to staff, maintenance and cleaning supplies. Only one housekeeping staff is needed for this model.
The long-term renter model requires less input and work from management, which means a more relaxed lifestyle for the new investor. However, this model does generate less revenue compared to the next two models. One major advantage of the long-term model is that you operate under the legal condominium and condominiums are not charged any taxes except property tax.
The long-term renter model generates around 190,000 USD in revenue and has low operating expenses of around 25-30,000 USD.
This model is completely the opposite of the previous model in the sense that the model only includes short-term renters. Short term in this case would be from one night up to a few weeks but no more than a month. In this model we include all the utilities and services in the rental rate.
Rates in this model are always calculated on a nightly basis. If clients want to stay several nights or more we add a discount on the nightly rate and multiply it by the total nights. The revenue generated by a 9-night stay during the high season would more or less amount to the same revenue as a month stay with a long-term rental contract.
The difference in revenue is clearly much more attractive in this model. The drawbacks are a lower occupancy rate as well higher operating expenses as all the utilities are included in this model. Also housekeeping costs (with cleaning service every two days) as well as commissions are much higher in this model. More work, time and dedication are required for this model from both management as well as the housekeeping department. All the cleaning tasks required on a short-term rental model with three full-time housekeeping staff. The short-term renter model generates around 300 – 350,000 USD in Revenue and has operating expenses of around 40,000 -50,000 USD.
The hybrid model is a combination of both short term and long term clients and from experience is the most efficient model as the expenses incurred during the low season month are covered by long term clients and all extra profits are made with the remaining short term profits. The Hybrid model generates around 250 – 300,000 USD in Revenue and has operating expenses of around 35,000 USD.
The corona model is the latest model and is a combination of both medium term and long term clients, while having just enough long term clients to cover all the running expenses. According to recent calculations having between two and three fixed renters of larger apartments offsets all the operating expenses. All the remaining units available can therefore be set on the medium term market (and when possible short term) in order to maximize the revenue potential while being assured that your expenses are covered no matter the market conditions. This model has proven to be successful during the lockdown as well as a post Covid-19 market, as travel was cut back to a minimum.
Revenue dropped significantly when comparing 2019 to 2020 but still the business managed to turn a profit which is very good considering most hotels and vacation rental businesses were generating major losses and many remained closed even after the first lockdown period as they did not get any demand. This business on the other hand was often fully booked during 2020.
The Corona model generates around 160 – 190,000 USD in Revenue and has operating expenses
of around 30,000 USD.
The sale includes the entire condominium with its separate holding company as well as all 16 apartments with furnishings, the common area, the back of the house areas and the entire land on which the project is built. The company website, its client base, know-how as well as all the staff, procedures and separate trained management in case the new owner will not manage the project himself is also included in the sale.
They are in no rush to sell as this project provides a steady cash flow. However, the family has been managing it for a little over nine years and originally planned it as a 10-year project. They are now in a position where they are ready to sell if we receive the right offer.
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