Transparent Methodology

How We Calculate Your Returns

At Sienna, transparency is fundamental to building investor confidence. We provide complete visibility into our calculation methodology, data sources, and assumptions so you can make fully informed investment decisions.

Our Commitment to Transparency

Every ROI projection we present is based on verifiable data sources, clearly stated assumptions, and conservative estimates. We believe investors deserve to understand exactly how their potential returns are calculated and what drives the underlying assumptions.

Verified Data Sources

Primary Market Data Sources

✓ AirDNA Vacation Rental Analysis: 2024/25 Las Terrenas market data including occupancy rates, nightly rates, and seasonal patterns ✓ Dominican Republic Central Bank: Economic data and tourism statistics ✓ Local MLS Data: Real estate transaction records and comparable sales analysis ✓ Independent Property Appraisals: Certified DR appraiser valuations ✓ Tourism Ministry Statistics: Visitor numbers and growth projections ✓ El Catey Airport Data: Flight schedules and passenger volume trends ✓ CONFOTUR Law Documentation: Official tax benefit verification

Internal Performance Data

✓ Sienna Owner Performance: Actual returns from existing owners ✓ Construction Cost Analysis: Real supplier quotes and contractor bids ✓ Management Performance: Track record from property management team ✓ Local Market Intelligence: On-ground expertise from Las Terrenas operations

Rental Income Calculation Methodology

Step 1: Market Rate Analysis (AirDNA 2024/25)

We analyze actual booking data from Las Terrenas luxury vacation rentals to establish nightly rate ranges:

Villa Size Market Rate Range Sienna Base Rate Data Points 1BR $145-$218/night $145 47+ properties 2BR $210-$315/night $210 38+ properties 3BR $310-$465/night $310 52+ properties 4BR $420-$630/night $420 29+ properties 5BR $565-$848/night $565 23+ properties

Methodology: We consistently use the lowest verified market rate to ensure conservative projections.

Step 2: Seasonal Rate Distribution

Based on AirDNA seasonal analysis for Las Terrenas market:

Season Days per Year Rate Multiplier Market Justification Low Season 195 days Base rate (1.0x) April-June, Sept-Nov High Season 142 days 1.15x base rate Dec-Mar, July-Aug Very High Season 28 days 1.25x base rate Holidays, special events

Conservative Buffer: Market supports 20-30% high season premium and 40-50% peak premiums, but we use only 15% and 25% respectively.

Step 3: Occupancy Rate Analysis

Market Data (AirDNA 2024/25):

  • Las Terrenas Average: 53% occupancy

  • High Season Peak: Up to 65% occupancy

  • Low Season Average: 38% occupancy

Sienna Projection: 50% annual occupancy (conservative vs. market average)

Step 4: Revenue Calculation Example (3BR Villa)

Low Season: 195 days × 50% occupancy × $310/night = $30,225
High Season: 142 days × 50% occupancy × $357/night = $25,337
Very High Season: 28 days × 50% occupancy × $388/night = $5,432
Total Gross Annual Revenue: $61,094

Fractional Share (33%): $61,094 × 33% = $20,161

Operating Expense Methodology

Property Management Fees

  • Industry Standard: 15-18% of gross rental income

  • Sienna Rate: 20% of gross rental income + $80/month base fee

  • Rationale: Higher rate ensures premium service and property maintenance

Operating Cost Analysis (Per Month - 3BR Villa)

Expense Category Full Ownership Fractional (33%) Data Source HOA Fees $455 $147 Actual HOA budget Maintenance $260 $87 Local service quotes Utilities $210 $70 Average consumption data Insurance $75 $25 Insurance provider quotes Property Management $240 $80 Management company rates Total Monthly $1,240 $409 Verified actual costs

Expense Methodology

  1. Direct Quotes: Actual supplier and service provider quotes

  2. Historical Data: Average costs from existing Las Terrenas properties

  3. Conservative Buffer: 15-20% above current rates for inflation protection

  4. Proportional Allocation: Fractional owners pay exact proportional share

Property Appreciation Methodology

Historical Analysis (5-Year Data)

Las Terrenas Luxury Property Appreciation:

  • 2020: +6.2% (pandemic year - lowest)

  • 2021: +11.4% (recovery surge)

  • 2022: +9.8% (continued growth)

  • 2023: +7.9% (market normalization)

  • 2024: +8.3% (steady growth)

  • 5-Year Average: 8.7%

Sienna Projection: 8.0% (conservative vs. historical average)

Market Driver Analysis

✓ Supply Constraint: Environmental laws limit new development to 2-3 projects annually ✓ Tourism Growth: 15% annual increase in international visitors (Tourism Ministry) ✓ Infrastructure Investment: $47M El Catey Airport expansion completed 2024 ✓ Economic Stability: DR tourism economy resilience during global uncertainty

Comparable Property Analysis

Recent luxury property sales in Las Terrenas (2024):

  • Oceanfront villas: $1,200-$1,800/sqm

  • Hillside luxury: $900-$1,400/sqm

  • Sienna Pricing: $800-$1,200/sqm (20% below comparable market)

Tax Benefit Calculation Methodology

CONFOTUR Law Analysis

Legal Framework: Dominican Law 158-01, verified by legal counsel

Tax Savings Calculation (3BR Fractional 33%)

Tax Type Rate Calculation Base Annual Savings Methodology Property Transfer 3% Purchase price $5,456 one-time Legal requirement Property Tax 1% Assessed value $1,729 annually Municipal assessment Rental Income Tax 27% Net rental income $3,395 annually Conservative net income

Verification Process:

  1. Legal counsel review of CONFOTUR eligibility

  2. Municipal tax office confirmation of rates

  3. Tax accountant verification of calculations

  4. Annual compliance monitoring

Financial Model Construction

3BR Fractional Investment Example - Complete Calculation

Initial Investment Breakdown:

Property Purchase (33% share): $172,983
Furniture & Setup Package: $6,666
Legal & Closing Costs: $533
LLC Setup & Management: $1,667
Total Initial Investment: $181,848

Annual Income Calculation:

Gross Rental Income: $20,161
Less: Property Management (20%): $4,032
Less: Monthly Management Fee: $960
Plus: Utility Savings (charged to renters): $400
Net Rental Income: $15,569

Property Appreciation (8%): $13,839
Annual Tax Savings: $5,124
Total Annual Return: $34,532

ROI Calculation: $34,532 ÷ $181,848 = 19.0%
Adjusted for instant equity over 5 years: 16.8%

Sensitivity Analysis

We test our projections across multiple scenarios:

  • Occupancy Range: 30% to 70% (base case 50%)

  • Rate Variation: ±20% of base rates

  • Appreciation Range: 4% to 12% (base case 8%)

  • Expense Inflation: 0% to 5% annually

Independent Verification Process

Third-Party Reviews

✓ Financial Analyst Review: Independent financial analysts validate our methodology ✓ Legal Verification: Dominican legal experts confirm tax benefit calculations ✓ Market Research Validation: Real estate professionals verify market data accuracy ✓ Appraisal Confirmation: Certified appraisers validate property value assumptions

Ongoing Verification

  • Quarterly Market Updates: AirDNA data refresh and market analysis

  • Annual Model Review: Complete assumption validation against actual performance

  • Owner Performance Tracking: Real returns vs. projections monitoring

  • Independent Audits: Annual third-party validation of financial models

Assumption Documentation

All Assumptions Clearly Stated

Every projection includes detailed assumption documentation:

  • Market data sources and dates

  • Conservative adjustments applied

  • Risk factors and mitigation strategies

  • Sensitivity analysis results

  • Comparable investment performance

Regular Updates

  • Monthly: Rental market data updates

  • Quarterly: Market condition assessments

  • Annually: Complete methodology review

  • As Needed: Material market change adjustments

Your Right to Verification

Complete Transparency Package

Upon request, we provide: ✓ Source data spreadsheets with calculations ✓ Market research reports and analysis ✓ Legal documentation supporting tax benefits ✓ Independent appraisal reports ✓ Comparable property performance data ✓ Management company track record documentation

Independent Review Encouraged

We encourage all investors to:

  • Verify our assumptions with independent sources

  • Consult with financial advisors about projections

  • Request additional data or clarification

  • Conduct independent market research

  • Review legal documentation with qualified counsel

Methodology Evolution

We continuously improve our methodology based on:

  • Market Performance Data: Real results inform assumption refinements

  • Investor Feedback: Owner experiences guide methodology improvements

  • Industry Best Practices: Ongoing education and professional development

  • Regulatory Changes: Legal and tax environment updates

Our transparent methodology reflects our commitment to your informed investment decision. Request our complete financial model workbook for detailed analysis and verification.