The expected distribution yield is only an indication and cannot be used as an accurate or guaranteed statement.
This should give the investor a rough indication of the tendency to be expected in the annual distribution for this property, in the case of full letting and without extraordinary costs.
The indication is based on crowdhouse's empirical values and historical developments. We have used averages in forecasting the expected distribution, but in reality these can vary widely. On the individual points:
- The net rental income is given on the purchase of the property based on the current tenant level, but may vary upwards or downwards. Negative influencing factors are, for example, vacancy rates, rent reductions due to a reduction of the reference interest rate, or general rent reductions due to deficiencies etc. The rental income can be positively influenced by rent increases, optimisation of utilisation, extensions of rented premises or additional rental space etc.
- The mortgage interest is based on the mortgage agreement concluded by the co-owners. Crowdhouse generally recommends the conclusion of a long-term fixed-rate mortgage at a fixed interest rate. Thus the expected return over the next few years can be calculated more reliably. With money market mortgages (LIBOR), the mortgage rate changes on the basis of the conditions of the financial market in a fixed cycle, for example of three or six months. We do not recommend this type of mortgage for the property investment form offered on crowdhouse, as it can lead to unpredictable fluctuations in income and accordingly carries more risk.
- The operating costs consist of the operating costs that cannot be passed on to the ancillary costs and any official fees, insurances, etc.The ancillary costs are settled on account, i.e. exactly according to the ancillary costs incurred. The operating costs and insurance in the calculation are based on an assumption founded on historical data. These can vary. If additional charges cannot be enforced on the renter for whatever reason, they may be negatively affected.
- Maintenance / upkeep is based on estimated costs for minor repairs, upkeep and maintenance. For larger repairs, these costs may increase. For less repairs, these sink.
- The fees for property management and co-ownership management are based on the contracts between the investors and crowdhouse for the management of the property and the management of the co-ownership shares.
- The annual amortisation of the mortgage is based on the mortgage contract concluded. As a rule, the expected amortisation of the mortgage per year is between 1% and 2% of the mortgage sum. The amortisation affects cash flow and is deducted accordingly from the property result in order to calculate the possible distribution. When the property is sold, however, the amortised sum is distributed pro rata to the co-owners.
- The creation of the security funds is obligatory for all co-owners to the sum of 5% of the net rental income and will be used in the future for unexpected costs incurred such as repairs and the like. The percentage for the renewal fund can be increased by the co-owners. When the property is sold, the accumulated capital is divided proportionally according to co-ownership. Further details can be found in the investment conditions.
Since all values are based only on empirical values and therefore do not promise guaranteed results, the expected return is merely a guide, not a guaranteed yield distribution.
However, this provides a good and transparent overview of what the return and yield distribution for this specific property should ideally look like. Ultimately, the co-owners at the annual co-owners' meeting decide on the basis of the result of the total income minus all costs whether and to what extent the allowance is to be distributed to the co-owners as return.