Rental management at Coco Beach
Starting in 2020, under the supervision of the Coco Beach site manager (Gary Wilson), Coco Beach will offer a professional rental management service to our clients.
Rental management- what is included?
- Collection of rental fees of clients including fees for usage of electricity and water;
- Drafting tenancy agreements taking all your individual needs into account, and which take into account Panamanian Law;
- Reception of the guests at the Coco Beach front desk, handing over and explanation of the information package with rental rules and regulations and handing over the keys to their rental villa. Also we will arrange a short villa tour explaining usage of electricity and appliances, gabarage disposal, usage of amenities etc;
- Tenant selection and screening in case of long-term rentals;
- Regular cleaning services in case of longterm rental (> 4 weeks); cleaning services will be paid by the tenant;
- Administrative duties such as obtaining signed tenant agreements and checking and registration of identification documents, bonds, insurance;
- Property inspection before and after each rental, including photo’s of the property before and after each client visit to be send to you, the villa owner;
- Arranging cleaning services after each rental and garbage disposal; the fees are included in the rental agreement to clients; cleaning will be mandatory;
- Obtaining a rental bond and dealing with the proper management of repairs and financial compensation by the renter or insurance company;
- Regular maintenance issues (labor costs and material cost for repairs excluded)
- Providing property insurance if required, the cost of the insurance is not included;
- Local and international marketing services;
- Air BnB registration and management (at an additional fee)
- Customer feedback registration.
- Security 24/7.
All in all, our rental management program is aimed at hassle-free income generation and protection of your income and the quality of your villa.
Rental income garantee in 2020
To compensate for the fact that Coco Beach will not be fully completed in 2020 (the pool will be build by latest March 2020 and villa construction will be ongoing) Coco Beach is offerting a rental revenue garantee for 2020 of 5000 $ net rental revenue.
What is the rental income garantee?
Coco Beach offers a 5000$ net rental income garantee under the following conditions:
- Villla construction starts before October 2019;
- Construction of your villa must be completed in 2020; in general construction will take not longer than 12 months;
- You formally apply for rental management services of Coco Beach, which will be free of charge for 2020;
- 50% average availability of your rental property after completion
of your villa during 2020;
- Panama Portfolio will determine the rental rates during 2020 to maximize your income using local experience.
Within two weeks after the end of 2020 you will receive a 5000$ garanteed rental income payment and during 2020 you will have no additional cost for the labor that we provide to execute the Rental Management Program- Panama Portfolio will run the rental management service on your behalf free of charge.
After 2020 you will have more experience with the rental management program and you might opt to arrange certain rentals yourselves, the rental management program is not mandatory.
Rental clients have the right to use the amenities.
In case net rental revenues are higher than $5000 in 2020 we will transfer the additional rental revenue to you as well.
Expected rental income 2020 onwards
For a standard two bedroom villa we expect net rental income during the folowing years to be the following basis a 50% average rental availability:
|2020||$ 5000 / Year|
|2021||$ 8000 / Year|
|2022||$ 8000 / Year|
|2023||$ 8000 / Year|
|2024||$ 8000 / Year|
Please note that rental income is dependant on many factors such as competiton, quality of the rental property, number of bedrooms, services offered and rental management fees.
Rental management fees will be zero for 2020 and between 25 and 35% for subsequent years. The above number are net rental income, i.e. net income to you.
In general rental rates for property in Panama are higher if the property is rented in gated communities with amenities and within communities with security (although the security situation is not a problem, see the section on security in our FAQ section). Also rental rates are higher for properties with airconditioning close to the beach.
Ok, so how do you justify expected rental income?
In order to arrive at a annual rental revenue of $ 8000 in 2021 and beyond we have used the following assumptions:
- 50% rental availability rate, which means that your villa is available for rental
purposes during 182 nights per year. However, the occupancy rate is in our view
about 55% which coincides with the current occupancy rates in hotels in Panama City
- This means that we will generate an income for you during 182 * 50%= 91 nights;
- The rental management program will cost 25%, so the nightly rate will be
88 $/night net or including rental management fee 117 $ per night to the client,
excluding cleaning fees and excluding extra fees for variable costs such as electricity.
So the real question is:
- Is a nightly rate of on average 117$ per night for a villa on the beach high or low?
Justification of the nightly rate assumption of 117 $ for an oceanview villa
Intuitively we know the answer to the above question already, a nightly rate of 117 $ per night basis occupancy of 55% is cheap for a design (4-person or more ) villa near the beach on a guarded community with amenities and a pool. But we don’t want to rely on intuition, so hereby we provide you with some data which proves our assumption.
Booking.com data as per 17-1-2019 for a 2-person room, not a villa !!
Arrival Chiriquí Panama: 20-1-2019
Departure Chiriquí Panama: 23-1-2019
# hotels resorts price range
# hotels resorts beachfront
If you have any further questions do not hesitate to ask, we will answer them as quickly as reasonably possible. We realize rental income might be a decisive factor for you, so we take rental income very seriously.