What NOI Can a Well-Located Asunción Apartment Generate on Airbnb
Have you ever wondered how much income a short-term rental in Recoleta (Asunción, Paraguay) can generate? Using a real-life example backed by screenshots, we’ll explore the solid results achieved by one apartment over a period of 4.66 months.
Getting the Vocabulary Right:
Mistakes Were Made
First, let’s ensure we’re on the same page to avoid confusion. When I first started promoting my content in a Facebook group called Expats in Paraguay, I created a post intending to highlight that you can achieve around 10% “rentabilidad” (similar to NOI/net return) through Airbnb with well-located apartments near major shopping malls. However, I mistakenly used the term Cap Rate instead of “rentabilidad”, which led to comments claiming a 10% Cap Rate was unrealistic and accusations of inflating numbers. I apologize for the confusion—English isn’t my native language (though I picked up quite a bit playing video games: press start to continue!).
To simplify, here is the definition
of NOI I will use for this
case study:
“Net Operating Income (NOI) is a metric that measures the profitability of a rental property. It is calculated by subtracting all operating expenses from the total revenue generated by the property. A higher NOI indicates greater profitability, achieved by maximizing revenue and minimizing costs.”.
Source: SmartRent
To simplify, here is the definition
of NOI I will use for this
case study:
“Net Operating Income (NOI) is a metric that measures the profitability of a rental property. It is calculated by subtracting all operating expenses from the total revenue generated by the property. A higher NOI indicates greater profitability, achieved by maximizing revenue and minimizing costs.”.
Source: SmartRent
This is what we refer to as “rentabilidad neta” here in Asunción. At Proinvest, we calculate NOI like this:
Let’s assume the investor paid $49,226 for a studio loft (monoambiente), added $985 for notary fees (transferencia), and spent approximately $4,500 on furniture, appliances, and other equipment. This brings the total investment to $54,711.
Monthly expenses:
- $32.27 (expensas or HOA fees)
- $12.82 (accounting fee)
- $64.10 (electricity, internet, and TV)
- $12.29 (property tax)
With these expenses, the yearly net income is estimated at $6,192, assuming an 85% occupancy rate and charging $35 per night on Airbnb.
Summary:
The owner invested $54,711 and received an estimated yearly net income of $6,192, resulting in a NOI of approximately 11.3%.
The Building
The apartment featured in this real-life example is located in First Living, a project developed by Proinvest, a local real estate development company specializing in high-yield investments. Inaugurated in April 2024, the building was specifically designed for short-term rentals. Its compact, low-maintenance units, affordable HOA fees, and prime location make it particularly attractive to investors (we’ll explore this further in the “LOCATION, LOCATION” section of the article).
In addition to its design and location, First Living offers amenities highly valued by both long-term tenants and short-term guests. These include a pool, a barbecue area with air conditioning, and fast Wi-Fi—a must for business travelers needing reliable Zoom connections.
With these features, First Living exemplifies how thoughtful design and strategic planning can maximize profitability for property owners.
Performance of Unit 505
Unit 505 began operations in August 2024 (it was active 66% of the month), and by December, it had generated a total revenue of $4,703, with an average monthly income of $1,009. In terms of expenses, the monthly fixed costs, including HOA fees, internet, electricity, and taxes, amounted to $154.2. Additional variable costs, such as cleaning services, system fees, and outsourced Airbnb administration, totaled $193.9. It is important to note that the outsourced Airbnb administration fee is only 10% due to a special agreement Proinvest secured with a company, as this cost is usually around 20%. This brought the total monthly expenditures to $348.1, leaving a net income of $661.1 per month, or $7,933 annually.
Considering the unit’s initial price off-plan (pre-construction) at $71,000, plus $1,339 in notary fees and $4,715 for furniture and equipment, the total investment amounted to $77,054. With an annual net income of $7,933, this results in a Cap Rate of 10.3% based on the initial investment.
Additionally, with the unit’s estimated current market value of $110,000, the annual net income results in a Cap Rate of 7.2%.
Even though the unit hasn’t been operational for a full year, these figures clearly demonstrate its strong performance and investment potential.
To ensure transparency, screenshots are included in this article to verify these figures, along with the profitability spreadsheet above shared by Manfred Huth, director of Proinvest. Manfred was kind enough to provide detailed data on Unit 505’s performance, including its monthly revenue and expenses. His openness demonstrates the reliability of these numbers and Proinvest’s commitment to helping investors make informed decisions.
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Considering the unit’s initial price off-plan (pre-construction) at $71,000, plus $1,339 in notary fees and $4,715 for furniture and equipment, the total investment amounted to $77,054. With an annual net income of $7,933, this results in a Cap Rate of 10.3% based on the initial investment.
Additionally, with the unit’s estimated current market value of $110,000, the annual net income results in a Cap Rate of 7.2%.
Even though the unit hasn’t been operational for a full year, these figures clearly demonstrate its strong performance and investment potential.
To ensure transparency, screenshots are included in this article to verify these figures, along with the profitability spreadsheet above shared by Manfred Huth, director of Proinvest. Manfred was kind enough to provide detailed data on Unit 505’s performance, including its monthly revenue and expenses. His openness demonstrates the reliability of these numbers and Proinvest’s commitment to helping investors make informed decisions.
LOCATION, LOCATION
The impressive performance of Unit 505 is largely attributed to its prime location within First Living, which has maintained an average occupancy rate of 90%. It’s important to note that such high occupancy rates are not easily achievable throughout Asunción, which is why we always recommend investing near one of the city’s main shopping malls. These areas have become the new corporate hubs and offer the best lifestyle options in town, making them prime real estate spots.
What makes Recoleta particularly valuable is its walkability—something that can’t be said for many areas of Asunción, which, frankly, are often hostile to pedestrians. Recoleta provides easy access to a variety of dining, shopping, and entertainment options, all within walking distance. This not only enhances the living experience but also attracts both business and leisure travelers looking for convenience and accessibility. Additionally, Recoleta is adjacent to Villa Morra, considered by many the best neighborhood in Asunción due to its commercial venues, gastronomy, and safety. In fact, Recoleta and Villa Morra are often synonymous for locals, who use the names interchangeably since both neighborhoods are in the
same area.
In addition, the building is situated near major banks, making it an ideal choice for those working or investing in Paraguay. This combination of location, accessibility, and lifestyle appeal has undoubtedly contributed to the unit’s high demand and strong performance.
