Dividends paid to investors represent cash flow after expenses and reserves.
Each property holds a cash reserve balance, which covers planned and unplanned operating expenses such as property tax, home insurance, repairs and maintenance, and vacancy costs. As the cash reserve balance decreases, it is replenished with rental income.
Over time, dividends for a property can increase, maintain, or decrease based on cash flow and the financial health of reserves.
Here are the guidelines we follow to adjust the property dividends over time. These guidelines are directional and help us make informed decisions regarding the dividends of the property. We strive to ensure that these guidelines are followed consistently to maintain the overall fairness and equity of the process.
Possible reasons why property dividends are increased:
When a property exceeds its initial cash reserve
When a property is leased at a higher-than-expected monthly rent
When a property signs a second lease at an increased annual rate
When a vacation rental exceeds expectations or has ample cash reserves during high season
Possible reasons why property dividends are lowered or paused:
When a property's cash reserve falls below the initial amount, dividends are temporarily halted until the reserve is replenished
When a property is not currently generating income, either through extended vacancy or an issue with an eviction or unlawful tenant
When a property has long-running issues like a major repair that is needed
Vacation rentals that are not yet booking-ready
Vacation rentals that are either performing under expectations or are going through the low season and are seeing reduced revenue