Rental Yield in the Bahamas: What a Villa in Nassau Can Really Earn

Published on July 14, 2026 and written by Cyril Jarnias

Behind the postcards of white sand and turquoise waters lies a real estate market that has become one of the most profitable in the Caribbean. For a French-speaking investor who looks at the numbers rather than the palm trees, one question arises: how much can a villa in Nassau really yield in 2026, once you step away from the promotional brochures and dive into the data?

An extremely favorable context for vacation rentals

The starting point is demand. The Bahamas welcomed 12.5 million visitors in 2025, a record, with an increase of more than 11% in one year. In the first quarter of 2026 alone, arrivals grew another 17.5% to reach 3.9 million visitors, driven by a cruise sector boom as well as the upscaling of stayover tourism.

Rental platforms confirm this momentum. An AirROI dataset covering June 2025 to May 2026 estimates the average annual Airbnb revenue in Nassau at $27,876, with an average nightly rate of $336 and an occupancy rate of 35.3%. Other analyses, more focused on the well-located villa segment, show higher levels: $7,620 in average monthly revenue during high season, with 66% occupancy and an average nightly rate of $385 for villas positioned in the upscale segment.

How much does a villa rent for in Nassau? The real orders of magnitude

In the Bahamas, and particularly in Nassau, villas are not rented like a simple urban apartment. Values are often calculated by the week and skyrocket during high season. Data observed on vacation homes gives a clear range based on property size.

Rental levels by villa size

For vacation villas throughout the archipelago, including those in Nassau and Paradise Island, the average observed performances are as follows:

Villa type	Average rental income	Reference period
2–3 bedrooms	$7,000 – $18,000	per week
4–5 bedrooms	$15,000 – $40,000+	per week
6+ bedrooms (luxury estates)	$50,000 – $150,000+	per week

These figures correspond to “standard” weeks in high season. Christmas and New Year’s weeks, classified as “prime weeks,” can rent for two to three times that level, with rates that become frankly stratospheric in the most upscale residences.

The nightly rate grids in Nassau confirm this very upscale positioning:

Area / product in Nassau	Price range per night (high season)	Property profile
Lyford Cay, Old Fort Bay	$1,500 – $6,000	ultra-luxury estates, beach access
Canal-front villas, villas near Ocean Club on Paradise Island	$1,000 – $3,500	luxury villas with marina/golf
Cable Beach condos (Baha Mar, Rosewood)	$500 – $1,800	apartments and serviced residences

This is far from a simple “vacation apartment”: Nassau plays in the league of premium beach markets, with villa rates comparable to those of the finest Mediterranean islands or the most selective Caribbean destinations.

Occupancy rates: between overall average and top performers

A high rate does not guarantee a good yield if the villa remains empty. That is where occupancy data becomes decisive.

Across all Airbnb listings in Nassau, all property types combined, several datasets give slightly different but overall consistent pictures. A useful overview to understand what is “average” and what qualifies as performance.

Indicator (Nassau, STR market)	Typical value
Average annual Airbnb revenue (all listings)	$27,876
Average daily rate (ADR) – AirROI dataset	$336
Average occupancy rate – AirROI dataset	35.3%
Average monthly revenue in high season (luxury villa segment)	$7,620
High season occupancy rate (luxury villa segment)	66%
Typical annual occupancy – well-managed properties	60–65%
Annual occupancy of top performers	70–85%

In practice, seasonality drives occupancy far more than the annual average. For Nassau, the pattern that emerges is as follows:

Nationally, vacation rentals for “entire place” across all islands posted an average occupancy rate of 57.7% in the first quarter of 2026, compared to 55.1% a year earlier, a sign of an upward trend. During this time of year, Nassau is generally well above this average, thanks to the capital’s status as a tourist hub.

For an investor targeting a well-managed villa, the data thus converges on a reasonable target of 55 to 65% annual occupancy, and up to 70–80% during high season.

Gross rental yield: where does Nassau stand in the archipelago?

To measure the profitability of a villa in Nassau, you need to relate rents to the cost basis of the property. Several gross yield indicators are available, both nationally and locally.

Across the entire Bahamas, Global Property Guide measures an average gross rental yield of 6.52% in the second quarter of 2025, slightly down from 6.63% at the end of 2024. This figure primarily aggregates long-term rentals.

When you zoom in by island or area:

Bahamian market	Typical annual rental yield (long-term)
Grand Bahama	8–10%
Nassau	5–7%
Abaco	6–8%
Exuma	5–7%
Eleuthera	4–6%

Nassau therefore clearly falls below Grand Bahama in classic gross yield, due to much higher purchase prices. A concrete example is often cited: a waterfront house at $500,000 in Grand Bahama rented for $3,500 per month, i.e., $42,000 per year and a gross yield of 8.4%. A similar property in Nassau would cost around $800,000 or more and would produce a gross yield of roughly 5 to 6%.

Studies also take yields by property type (long-term rental) as a benchmark:

Property type (Bahamas)	Average sale price	Average monthly rent	Gross yield
1 bedroom	$422,250	$2,200	6.25%
2 bedrooms	$500,000	$3,200	7.68%
3 bedrooms	$945,000	$4,500	5.71%
4+ bedrooms	$1,490,000	$8,000	6.44%

These yields are calculated primarily on a long-term basis, therefore lower than the potential of well-managed short-term rentals, but they provide a useful baseline for situating Nassau within the national range: the capital remains a market at around 5–7% gross in classic leasing.

Vacation villa specificity: realistic 8–12% gross yields

When you switch to the world of nightly or weekly short-term rentals, gross yields transform. Several sources agree that, for well-managed villas, gross yield can reach 8–10%, or even higher, on certain models.

Performance data on villas shows:

For a $2.5 million villa in Nassau, positioned in the upscale niche, performance simulations mention gross revenues on the order of $250,000, i.e., 10% of the property’s price. From there, the entire challenge lies in estimating expenses and measuring net yield.

Real costs: what eats into the yield

In the Bahamas, the good tax news is that rental income is not subject to income tax, capital gains tax, or inheritance tax. But that does not mean there are no frictions on yield.

For a rental villa in Nassau, the main cost items are as follows.

Rental-specific taxation

First, taxes related to the rental activity itself. Any vacation rental of less than 45 consecutive days is subject to a 10% VAT on rents collected. This VAT is charged to the traveler but passes through the owner or the platform, which collects and remits it to the Bahamian tax authorities. For stays longer than 45 days, rentals are classified as “dwellings” and are exempt from this VAT.

In addition to this VAT on rents, there is a hotel guest tax regime of 10% on nights sold in the tourist segment. Again, the operator is responsible for collection and remittance, although in practice, platforms like Airbnb or Vrbo often handle all the reporting on behalf of the owner.

Property taxes: a progressive scale

Rented villas not occupied by their owner fall into the category of non-residential investment properties. The rates applied for this type of property are:

– 0.75% of the value for the tranche up to $500,000,

– 1% for the tranche between $500,000 and $2 million,

– 1.5% beyond $2 million.

Other sources mention a slightly different scale for investment properties (1% on the first $500,000 and 2% on the balance), which shows that ongoing reform or legislative adjustments may still create some uncertainties. But in any case, the key message for a villa investor in Nassau is that they must factor in an annual property tax cost that, in practice, falls between 0.75% and 1.5% of the market value of their property.

Insurance, maintenance, HOA fees: the cost of paradise climate

In Nassau, as in any tropical marine environment, the combination of salt, humidity, and hurricanes increases holding costs. Cost studies observe:

– Annual insurance typically between 0.5% and 1% of the property’s value, with lower premiums for properties built according to post-2019 building codes.

– A recommended routine maintenance budget of 1 to 2% of the property’s value per year, to cover painting, exterior repairs, air conditioning, outdoor furniture, and minor work.

– HOA fees in Nassau’s gated communities (Lyford Cay, Albany, Old Fort Bay, Ocean Club Estates, etc.) ranging from $5,000 to $25,000 per year depending on the level of amenities (marina, golf, private beach, security, clubhouse).

A summary of holding costs shows that a $1 million beachfront condo in Nassau typically incurs $32,000 to $56,000 in annual fees (property tax, insurance, HOA, utilities). At $500,000 in value, the total falls rather into a range of $17,000 to $30,000 per year.

Property management: 20 to 30% of revenue

Most owners targeting an international clientele do not manage check-ins, cleaning, maintenance, and dynamic pricing themselves from abroad. The vast majority delegate to a local management company, for a commission:

– 20 to 30% of gross revenue for “full service” management including marketing, booking management, guest reception, cleaning, and vendor supervision.

– 10 to 15% for partial management focused on marketing and front office, with the owner retaining control over maintenance and suppliers.

In addition to these commissions, there are platform fees (Airbnb, Vrbo, etc.), cleaning fees charged to guests but potentially requiring subsidies to remain competitive, and costs for additional services (concierge, chef, excursions) that can boost revenue but complicate the operation.

Financial analyses compiled on the Bahamian market converge: after deducting all these costs (property taxes, insurance, HOA, maintenance, management, utilities, cleaning, platforms), net income typically represents 30 to 50% of gross revenue.

From theory to practice: what does a net yield on a villa in Nassau look like?

By combining the possible income level and the cost structure, we can estimate typical net yields for a vacation villa in Nassau in 2026.

Studies on the short-term rental market in the Bahamas readily place:

– Achievable gross yield on well-managed villas: 8 to 12% of the property’s value.

– The share of recurring costs (excluding financing): 50 to 70% of gross revenue.

– Target net yield, after all operating expenses: around 4 to 8% depending on strategy, property quality, and management.

– A luxury villa in Nassau valued at $2.5 million generating net income of $243,750, i.e., a cash-on-cash return of roughly 9.75% if one considers a targeted down payment corresponding to a portion of the price.

– A high-end condo on Paradise Island around $1.8 million, with a cash-on-cash return of 9%.

Even if these examples rely on specific financial structures (down payment, credit leverage, etc.), they confirm that well-chosen and properly operated villas in Nassau can aim for a net yield between 6 and 10% on invested capital, in an environment with no local income tax.

Internal comparison: Nassau versus other Bahamian markets

To gauge the appeal of Nassau, one must accept a trade-off: maximum yield or value appreciation and liquidity?

Grand Bahama boasts the highest gross yields in the entire archipelago, with 8–10% annual rental yield, thanks to lower purchase prices and structural rental demand (major employers with over 3,000 high-income expatriates, constant need for long-term housing). Under the specific Hawksbill Creek Agreement regime, some rental income can even be completely exempt from local taxes.

Nassau sits at the crossroads of these dynamics:

– Average yield, in long-term rentals, lower than Grand Bahama but higher than Eleuthera.

– High gross yield potential in short-term rentals, thanks to continuous tourist demand, proximity to the international airport, and density of amenities (Baha Mar, marinas, golf, restaurants).

– Significant value growth: the waterfront residential market on New Providence saw prices rise by 15.45% over 2025, with a national median price of $512,500 in the second quarter, up more than 9% year-over-year.

For an investor targeting a mix of rental yield and potential capital appreciation, Nassau, and even more so certain micro-markets like Lyford Cay, Albany, Ocean Club Estates, Old Fort Bay, or Cable Beach, remain very attractive.

Rules, registration, and regulatory framework for rentals

Another aspect impacts profitability: ease of operation. Since 2023, the Bahamas has more strictly regulated short-term rentals. Owners of properties rented on Airbnb, Vrbo, or any other channel must:

A Business License is also required for foreign operators and Bahamian companies, with an annual cost between $250 and $1,250 depending on the case. Individual Bahamians renting out their own properties may be exempt under certain conditions.

This regulatory layer, even if it remains much more flexible than in many North American or European jurisdictions, involves administrative procedures and regular tax monitoring, often entrusted again to a local manager.

Long-term or short-term: which model for an investor in Nassau?

The choice between long-term rental and seasonal rental significantly changes the yield and risk profile.

For long-term, average gross yields observed on the Bahamian islands hover around 4 to 6% per year, with strong stability. Expatriates, local professionals, and retirees provide a relatively predictable tenant flow. The example of Nassau shows average monthly rents around:

– $2,200 for a 1 bedroom,

– $3,200 for a 2 bedroom,

– $4,500 for a 3 bedroom,

– $8,000 for a 4+ bedroom.

For short-term, however, the income ceiling is significantly higher, at the cost of increased volatility and management intensity. The same or comparable properties, operated via Airbnb, Vrbo, or a specialized operator, can target gross revenues at 8–12% of property value. Some return-on-investment calculations show that, in certain setups, a well-secured long-term rental can produce a final net yield very close to—or even slightly higher than—a poorly optimized short-term rental.

How much can a typical investor expect from a villa in Nassau?

By aggregating the available data, we can sketch the profile of a villa investment in Nassau in 2026.

Imagine a 4–5 bedroom villa in a top-rated New Providence community or on Paradise Island, purchased between $2 and $3 million. Market data and performance ranges indicate:

For investors using leverage (borrowing), the key metric becomes net return on equity (cash-on-cash). In examples advanced in research, returns on the order of 9 to 10% on equity are considered achievable for luxury villas in Nassau, especially when leveraging the dual dynamic of rental income and asset value appreciation.

Structural strengths of Nassau for sustainable yield

If Nassau is not the Bahamian destination with the highest gross yields, it stands out for several elements that reinforce the long-term solidity of the investment.

The first strength is international tourist demand, overwhelmingly driven by North American clientele (82% of visitors come from the United States). Geographic proximity, good air connectivity, and infrastructure density (hotels, casinos, marinas, golf courses, Baha Mar, Atlantis, etc.) create an almost structural customer base for upscale rentals.

The third lies in the tax framework: no income tax, capital gains tax, or inheritance tax, allowing international investors to capture the full economic yield, subject to tax obligations in their country of residence. The VAT on short-term rentals, while present, is borne by travelers and not by the owner.

Finally, macro-financial stability, with central bank policy rates remaining stable since 2017 and mortgage interest rates around 5–5.5%, contributes to a relatively predictable environment for medium-term investors.

Conclusion: Nassau, a high-income villa market but one to filter rigorously

A villa in Nassau is not just a paradise backdrop: it is a productive asset that, if well chosen and well managed, can generate rental income well above many other beach destinations, while offering substantial appreciation potential.

The figures drawn from 2025–2026 data allow us to set some clear benchmarks for 2026:

For a French-speaking investor considering buying a villa in Nassau in 2026, the message is twofold. Yes, the rental yield can be very attractive, especially relative to an environment with no local income tax. But the selection of the property, a thorough understanding of real costs, and the choice of management model will make the difference between an expensive postcard and an asset that, year after year, largely finances its own sunset.