How Should I Model Owner-Use Periods in Cash-Flow Forecasts?

Start with a base occupancy assumption and then separate the times you’ll personally use the villa from the times it’s rented. Build 3 forecast scenarios: high occupancy (mostly rented, little owner-use), moderate occupancy (regular owner-use but still strong rental demand), and low occupancy (mostly owner-use with occasional bookings). For each scenario, treat revenue and costs as two streams: rental income (at expected nightly rates and occupancy %), and owner-use periods with no rental income. Fixed costs (mortgage or loan service, HOA fees, insurance, property tax) generally stay the same, while variable costs (utilities, cleaning, pool and garden maintenance, internet, property management) scale with occupancy. Don’t forget recurring maintenance and replacements for coastal wear and tear. Build in a reserve for seasonal maintenance, pest control, and potential emergencies. Document all assumptions, run sensitivity analyses (e.g., +/- 20-30% in occupancy or rate), and keep the plan updated as rules or prices change. If you’re unsure, run the forecast with a local property adviser to check reasonableness against local costs and typical occupancy patterns.