Many resort villas are offered with the option of placing the villa in a rental programme run by a hospitality operator. Done well, this keeps the villa cared for and can offset ownership costs. But the agreement — not the brochure — decides how it works. This guide explains the common elements in plain English. It is general information, not legal or financial advice.
What a management agreement does
It is a contract between you (the owner) and an operator, under which the operator markets your villa to guests, handles bookings and guest service, and maintains the property, in return for a fee or a share of revenue.
Common models
- Revenue share: income from guest stays is shared between owner and operator in an agreed proportion, usually after certain costs.
- Fixed fee plus costs: the operator charges a management fee and passes through operating costs.
- Pooled programmes: income from several villas is pooled and distributed by an agreed formula, which evens out differences between individual villas.
No model is automatically better. What matters is clarity.
Questions to ask
Income and costs
- Is revenue shared on gross or net income? Which costs are deducted first — commissions, housekeeping, utilities, maintenance, marketing?
- How often are statements and payments made, and how detailed are they?
- Who pays for refurbishment and replacements?
Your own use
- How many nights a year can you stay? Are peak dates restricted?
- How far in advance must you book your own stays?
Control and standards
- Who sets room rates and minimum stays?
- What standards must the villa meet, and who pays to meet them?
Term and exit
- How long is the agreement? Does it renew automatically?
- Can you leave the programme, with what notice and at what cost?
- What happens if you sell the villa?
Be careful with "guaranteed" returns
Any promise of fixed or guaranteed returns should be examined closely. Ask who guarantees it, for how long, how it is funded, and what happens afterwards. If it is not written clearly in the signed agreement, it is not a commitment. Projections are estimates, not results.
Get advice
Have your own lawyer review the agreement, and speak to a tax adviser about how rental income will be treated.
At CasaCabana we share resort-management and rental terms on request, in writing. Request investment details or read what to verify before investing.