You beneficially own a portion of the individual property via a specific UK Limited Company, (the SPV). You will receive a share of the dividends from the SPV every month, in direct proportion to your ownership of the SPV that owns the property.
The Dividends available to property investors are calculated as the Gross Rent collected from tenants, minus property-related costs including: purchase costs, furnishings, cosmetic remedial works, forecast maintenance, annual voids, corporate taxation, all fees and mortgage interest payments (for geared properties).
Under no circumstances will you be required to contribute further capital to cover the day-to-day management of the property or to cover any associated expenditure, e.g. routing maintenance, vacant periods or to cover defaults. If a property is under significant stress for any reason, e.g. increased cost of borrowing, or inability to refinance economically, the SPV that owns the property may raise further capital by issuing further shares - “Equity Fundraise” - participation is not compulsory, but not participating could lead to dilution of the value of your shareholding if the fundraise is successful.
Estimates of future Dividends are provided prior to you making an investment. These estimates are based on consultation with third parties, such as local estate agents and surveyors. We then apply estimates for void periods, on-going maintenance, and any other costs we envisage as per the above. Our estimates are available for review as part of the investment process. However, it is important to note that this information is based on estimates and London House Exchange does not provide investment advice in this regard. It may be that lower Gross Rents are secured and/or higher costs incurred. See also Key Risks.