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How are dividend amounts determined?
How are dividend amounts determined?
Korin Hedlund avatar
Written by Korin Hedlund
Updated over a week ago

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

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