In order to help protect net rental yields, and help provide investors with peace of mind, we have recently started including a ‘Provision Fund’ in the total fund amount of investment opportunities.
- £450 is charged for each year of the investment term to cover Property Insurance and for Utilities Cover.
- 1% of the property acquisition cost for each year of the investment term is also raised and is retained in the SPVs Provision Fund.
- All raised as part of the initial fund amount
1 – Property Insurance. This was previously deducted from monthly rental income and is now charged up front. We have a bespoke portfolio policy which helps to reduce the cost – the more properties that we can add, the better the deal that we can negotiate with the insurers.
2 – Utilities Cover. In order to avoid any large and unexpected charges over the winter, we have decided to take out cover for all of the SPVs. This will cover the boiler, gas, electric, plumbing and drainage. Not only is there 24 hour support, but the annual gas certificate that we need to supply to each property is also included.
3 – SPV Cash Reserves. The remaining funds will be used by the SPV to cover any unexpected costs, such as key cutting, or reattaching a door. This should help to smooth out rental income and will hopefully make projected rental yields more accurate. When, and if, the fund has been exhausted, deductions, such as those highlighted, will once again be taken from the gross rent of the SPV.
If there are any reserves left in the fund at the end of the investment term, the full amount will be redistributed to investors in proportion to their share of the property.
There will soon be a section breaking down these costs on the website, so look out for the change.
If you have any questions about this update then please don’t hesitate and get in touch.
Disclaimer and Legals
Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your Capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.
Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).
