How is Rental Income at Andara Projected and Managed?

Rental income for an owner at Andara is based on a detailed proforma that projects an 11-15% net annual return on investment, driven by the property's design, its location within Cap Cana, and an optional managed rental program. These projections account for operating costs and management fees, providing a clear picture of potential hands-off earnings.

What assumptions are behind Andara's 11-15% projected ROI?

The 11-15% net annual ROI is a projection, not a guarantee, calculated on an all-cash purchase. It is designed to give a realistic forecast of performance within Andara's optional managed rental program. The calculation is net of all major anticipated expenses, including the management fee and annual carrying costs.

The key inputs for this projection are based on the specific unit type, prevailing market conditions in Cap Cana, and the operational structure of the rental program. Understanding these assumptions is crucial for any investor evaluating the opportunity.

What are an owner's options for property management?

Owners at Andara have two primary routes for managing their property. The first is to participate in the optional, hands-off managed rental program. This service is structured for investors who want to generate income without handling the day-to-day logistics of a short-term rental. The program's goal is to optimize occupancy and revenue, and the 11-15% ROI projection is based on participation in it.

Alternatively, owners can choose to manage the property themselves or not rent it out at all, keeping the residence for purely private use. Owners who self-manage are responsible for all aspects of the rental process, including marketing the property on booking platforms, managing guest check-ins and communication, coordinating cleaning and maintenance, and ensuring compliance with Dominican tax regulations. This option offers more direct control but requires a significant hands-on commitment.

How do Andara's amenities and location support rental value?

A property's rental potential is directly tied to its desirability for travelers. Andara is designed to compete at the high end of the Cap Cana rental market. The community is located within the exclusive, gated master plan of Cap Cana, just a 15-minute drive from Punta Cana International Airport (PUJ).

The on-site amenities are extensive, creating a self-contained resort experience. These include seven separate pools, crowned by a rooftop adults-only infinity pool, a full wellness center with a yoga lounge, pickleball courts, a golf simulator, and coworking spaces. For renters, these features provide significant value beyond just the residence itself. The property's location fronting the Las Iguanas Golf Course and being a 10-minute drive from the famous Juanillo Beach further solidifies its appeal to tourists seeking a premium Caribbean vacation.

What taxes apply to short-term rental income for non-residents?

Non-resident owners who rent out their property in the Dominican Republic are subject to two primary taxes on that income. It is important to factor these into any personal income calculation, as they are separate from property taxes.

First, an 18% tax known as ITBIS (the Spanish acronym for Tax on the Transfer of Industrialized Goods and Services) applies to the value of short-term tourist accommodation. The responsibility for collecting and remitting this tax rests with the property owner, not with third-party booking platforms. Second, a 27% withholding tax is levied on the gross rental income earned by non-residents. This is considered a final, definitive tax, meaning no deductions for expenses (like maintenance or management fees) can be applied against the income. Your attorney can provide definitive guidance on compliance with these tax obligations.

Does the CONFOTUR tax exemption reduce my rental income tax?

This is a common and important question. Andara is an approved project under the CONFOTUR law (Law 158-01), which provides significant tax incentives to buyers. Specifically, a buyer of a CONFOTUR-approved property is exempt from the 3% Transfer Tax on the purchase and is also exempt from the 1% annual property tax (IPI) for a period defined by the law.

However, these benefits apply to the property itself, not the income it generates. The CONFOTUR exemptions do not extend to taxes on rental income. The 18% ITBIS and 27% non-resident withholding tax are governed by separate articles of the Dominican tax code and remain applicable regardless of the property's CONFOTUR status. While CONFOTUR significantly lowers the cost of owning the property, it does not change the taxation of the rental business conducted within it.

Common questions

Are short-term rentals permitted at Andara?

Yes, short-term rentals are permitted at Andara, forming the basis of the optional managed rental program. The specific rules and regulations for rentals are governed by the condominium's own bylaws, which all owners must adhere to.

What are the projected annual carrying costs for a residence?

The proforma estimates total annual fees for maintenance, insurance, and common utilities to be between $9,200 for a one-bedroom unit and $18,600 for the largest penthouses. The 11-15% net ROI projection is already calculated after these costs have been deducted.

Who is Onix Living, the developer of Andara?

Onix Living is a developer based in Cancún with projects in Mexico, Spain, and Panama. The company has delivered over 750 homes in its Caribbean projects and has roughly 1,960 residences completed or in development. Andara is their first project in Cap Cana, Dominican Republic.