Ownership, rental pool & costs
You can purchase your home and place it into the hotel room rental pool, deciding how many weeks you wish to use it a year yourself, and allowing the resort to offer the rest of the unused time for your benefit.
Rental pool or private use
| Rental Pool Villa Management Agreement | Private use Villa Maintenance Agreement | |
|---|---|---|
| What it is | Villa Management Agreement: the resort's letting manager rents your villa to guests as part of the resort's accommodation business. | Villa Maintenance Agreement: the villa is kept for your private use rather than placed in the rental pool. Under the villa lease, every owner must be party to either a management or a maintenance agreement at all times. |
| Revenue split | Villa Revenue = (Accommodation Revenue − Resort Operating Costs) × 50%, after the management fee has been deducted. Paid quarterly, with quarterly statements and an audited annual statement. | No rental revenue; the villa is not let in the pool. |
| Management fee | 5% of Accommodation Revenue across the managed villas (plus VAT if applicable), deducted first. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Operating costs (OPEX) | Your share of maintaining common areas and consumables: 2.5% of the purchase price annually, retained from accommodation revenue. Under the agreement this drops to 2% after the first resale of any unit, and the manager may adjust it to match actual resort operating costs. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Maintenance (FF&E) fund | An annual fund for future repairs and replacements: 1% of revenue in years 1–2, 1.5% in years 3–4, and 4% from year 5. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Maintenance | Non-structural maintenance of the interior and furniture package is covered by resort operating costs. Structural maintenance and refurbishment are the owner's cost. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Owner use | Up to 10 weeks a year (no more than 4 in high season and 6 in low season), with a minimum stay of 2 nights and 3 months' notice. There is a daily resort fee (for housekeeping and consumables) of 6% of the published room rate. This and ancillary services (meals, drinks, shopping, activities, resort transfers) are paid at checkout. Unused weeks go back into the rental pool and do not carry over. | Private use. To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Other owner costs | Villa lease rent and the owner's share of headlease rent and operating expenses, structural maintenance, and insurance. These can be deducted from Villa Revenue. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
| Term | Runs until the villa lease ends. The owner may exit with 12 months' notice by moving to a Villa Maintenance Agreement. The manager may end the agreement with 90 days' notice. | To be confirmed: terms of the Villa Maintenance Agreement are available on request. |
This is a summary of the standard Villa Management Agreement. The signed agreement is the binding document, and no particular revenue is guaranteed. Please get independent legal and tax advice.
The first villa's first year
The first villa ran at 75.8% occupancy in its first year and netted 8% p.a. after all costs.
Past performance is no guarantee of future returns. Returns depend on occupancy, rates and costs, and are not guaranteed. This is not financial advice.
Deposit and progress payments
You choose the location you desire and a villa that fits your budget, sign the sale and purchase agreement and a deposit of FJD $75,000 into a trust account (held in trust until the final scheme plan is approved, when the deposit moves to 10%). You then make progress payments as the villa is built, with the final payment due on the certificate of completion, when you can occupy your villa.
A Fiji private limited company
The recommended ownership structure is a Fiji private limited company.
Finance: up to 50% over 15 years at under 5% interest, subject to lender approval. It is generally possible to get financing for this sort of development from ANZ or Westpac.
Please get independent legal and tax advice before you buy.
Sublease to 2099, plus the villa
Most land in Fiji is leasehold, so you are purchasing a sublease for the lot your villa is built on. This lease is until 2099, with a rollover option for another 100 years if the local landowners do not purchase the villa from you at a fair market value.
You are also purchasing the structure, and the furniture and fittings.
Fixed designs and furniture package
The villa designs are fixed, and the colour schemes are also fixed, as is the furniture package. You are only able to choose the location and the size of the villa you want to own, and the optional Murphy bunk beds. Every villa comes with a 4 x 7 m pool as standard.
Earning income from your villa
It is possible to sign a management agreement with Paradise Cove Resort and have your villa added to the letting pool. You can then earn income from the room nights you don't use for your friends and family. The revenue is split 50/50 after commissions, management fees, advertising, VAT, operating expenses, land rent, insurance and any repair costs are deducted.
When you are not there
If you choose not to put your villa in the rental pool, you will sign a maintenance agreement with Paradise Cove Resort, and Paradise Cove will look after and maintain your villa on your behalf.
How often you can stay
If you are not in the rental pool, you can use your villa year-round; you are just not allowed to operate it commercially (i.e. no independent Airbnb etc.).
If you place your villa in the rental pool you are allowed 10 weeks a year of personal use: 4 weeks in the high season (1 April – 31 October, 20 December – 14 January) and 6 weeks in the shoulder season (1 November – 19 December, 15 January – 31 March).
What costs there are when you use your villa
1) Maintenance (FF&E) costs: an annual fund for future repairs and replacements, starting at 1% of revenue and stepping up over time (1% in years 1–2, 1.5% in years 3–4, 4% from year 5).
2) Operating costs: annual costs for your share of maintaining common areas, and consumables, at 2.5% of the purchase price annually.
3) A daily resort fee when you stay, for the provision of housekeeping and consumables (6% of the published room rate).
4) Ancillary services: things you purchase during your stay, like meals, drinks, shopping, activities and resort transfers to the island. These, and the daily resort fee, are paid at checkout.
Summary of the terms published at paradisecoveresortfiji.com/buyavilla. The sale and purchase agreement and management or maintenance agreement are the binding documents; please take independent legal and tax advice.
Talk through ownership
Ask about locations, the rental pool or the purchase process and we will reach out to you.
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