| The concept behind Buddha Garden Villa is to provide villa owners with a fantastic vacation home as well an attractive commercial investment. With its cutting edge' architecture, expansive land and floor areas, contemporary upscale furnishings and accessories, and top of the line service Buddha Garden Villa will be a very sought after location for international booking agents.
One key element that separates Buddha Garden Villa from other villas on the island is that it will be operated by a professional management company with a long and successful track record in commercial rental of private villas. Many other villa developments are run by people with no previous management or rental experience.
PT. ARRA BUANA INTERNASIONAL, the company contracted to manage both the day-to-day operations as well villa rental marketing, has recommended a strategy offering discounts of 20% or greater for the initial year of commercial operation. It serves to create a high level of occupancy and awareness in the first year which then carries forward into following years which are priced at regular rack rate. In reference to the yield tables below, this is the key explanation for the large percentage jump in Year 2 compared to Year 1.
6 YEARS REVENUE AND RETURN ON
INVESTMENT PROJECTIONS
| 2 BED ROOMS VILLA |
| BUDDHA GARDEN VILLA |
YEAR 1
2008 |
YEAR 2
2009 |
YEAR 3
2010 |
YEAR 4
2011 |
YEAR 5
2012 |
YEAR 6
2013 |
TOTAL
6 YEARS |
| Occupancy % |
50% |
55% |
60% |
60% |
60% |
60% |
58% |
| Average Net Room Rate |
265 |
285 |
310 |
335 |
335 |
335 |
311 |
| |
| Revenue |
|
|
|
|
|
|
|
| Total Villa Revenue (USD) 7 Units |
338,538 |
400,496 |
475,230 |
513,555 |
513,555 |
513,555 |
2,754,929 |
| Total Revenue per villa |
48,363 |
57,214 |
67,890 |
73,365 |
73,365 |
73,365 |
393,561 |
| |
| Expenses |
|
|
|
|
|
|
|
| 25% Management Fee |
12,091 |
14,303 |
16,973 |
18,341 |
18,341 |
18,341 |
98,390 |
| Annual Expenses |
13,320 |
14,652 |
16,117 |
17,729 |
19,502 |
21,452 |
102,772 |
| Total Operational Cost |
25,411 |
28,955 |
33,090 |
36,070 |
37,843 |
39,793 |
201,162 |
| |
| Total Profit per villa |
22,952 |
28,258 |
34,800 |
37,295 |
35,522 |
33,572 |
192,399 |
| Return On Investment |
9.98% |
12.29% |
15.13% |
16.22% |
15.44% |
14.60% |
83.65% |
5 YEARS REVENUE AND RETURN ON
INVESTMENT PROJECTIONS
| 1 BED ROOM VILLA |
| BUDDHA GARDEN VILLA |
YEAR 1
2008 |
YEAR 2
2009 |
YEAR 3
2010 |
YEAR 4
2011 |
YEAR 5
2012 |
TOTAL
5 YEARS |
| Occupancy % |
55% |
60% |
70% |
75% |
75% |
67% |
| Average Net Room Rate |
180 |
200 |
225 |
250 |
250 |
221 |
| |
| Revenue |
|
|
|
|
|
|
| Total Villa Revenue (USD) 5 Units |
180,675 |
219,000 |
287,438 |
342,188 |
342,188 |
1,371,488 |
| Total Revenue per villa |
36,135 |
43,800 |
57,488 |
68,438 |
68,438 |
274,298 |
| |
| Expenses |
|
|
|
|
|
|
| 25% Management Fee |
9,034 |
10,950 |
14,372 |
17,109 |
17,109 |
68,574 |
| Annual Expenses |
9,768 |
10,745 |
11,819 |
13,001 |
14,301 |
59,635 |
| Total Operational Cost |
18,802 |
21,695 |
26,191 |
30,111 |
31,411 |
128,209 |
| |
| Total Profit per villa |
17,333 |
22,105 |
31,296 |
38,327 |
37,027 |
146,089 |
| Return On Investment |
7.91% |
10.09% |
14.29% |
17.50% |
16.91% |
66.71% |
|
